Assume the Production Technology Changes for a Good That Is

question 43

Essay

Assume the production technology changes for a good that is currently produced in a perfectly competitive market.In particular,the new technology is such that the marginal costs of production for a single firm decline over the entire range of the demand curve for the good in question.How would this affect the number of firms that operate in this market? Explain.

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Definitions:

Standard Error Of Estimate

A measure that indicates the accuracy of predictions made in a regression analysis; it reflects the typical distance between observed and predicted values.

Coefficient Of Correlation

An analytical measure that identifies the strength and directionality of a linear relationship involving two factors.

Coefficient Of Determination

The coefficient of determination, often denoted as R^2, is a statistic used in the context of statistical models whose main purpose is to provide a measure of how well observed outcomes are replicated by the model, based on the proportion of total variation of outcomes explained by the model.

Pearson Coefficient

A measure of the linear correlation between two variables X and Y, giving a value between -1 and 1.