Initially, a Perfectly Competitive Industry That Has 1,000 Firms Is

question 437

Multiple Choice

Initially, a perfectly competitive industry that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good. In the short run, the price ________, firms with the new technology make ________ economic profit, and firms with the old technology ________.

• A) remains the same; zero; incur economic losses
• B) falls; positive; incur economic losses
• C) remains the same; positive; make normal profit
• D) remains the same; positive; incur economic losses

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Definitions:

Implementing Strategy

The actions, steps, and practices involved in carrying out strategies to achieve organizational goals.

Corporate Strategy

The overall plan or direction that a company adopts in order to achieve its long-term goals and objectives.

Competitive Strategy

A plan to achieve a competitive advantage in the market, often by distinguishing one's products or services from those of competitors.

Industries and Markets

Sectors of the economy and the competitive environments in which businesses operate.