An Industry Is in ________ If Firms Have No Incentive

question 204

Multiple Choice

An industry is in ________ if firms have no incentive to enter or exit in the ________ run.

• A) disequilibrium; short
• B) disequilibrium; long
• C) equilibrium; short
• D) equilibrium; long

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Definitions:

Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, indicating the flexibility of producers.

Deadweight Loss

An economic inefficiency resulting from the lack of or impossibility to attain equilibrium in the market for a particular good or service.

Tax Revenue

The income generated by the government through the imposition of taxes on goods, services, and income.

Supply and Demand

Supply and demand is a fundamental economic model describing how prices and quantities of goods and services are determined in a market.