Suppose That a Perfectly Competitive Industry Is in Long-Run Equilibrium

question 28

Multiple Choice

Suppose that a perfectly competitive industry is in long-run equilibrium. Then the price of a complement good decreases. What will happen?

• A) Next period a typical firm will increase output.
• B) Next period a typical firm will earn positive economic profit.
• C) Eventually firms will exit the industry.
• D) both a and b
• E) all of the above will happen

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Definitions:

Plan

is a detailed proposal for doing or achieving something, often involving the steps or actions needed to accomplish a goal.

Criteria

Standards or benchmarks that are used to evaluate or make judgments about different options or outcomes.

Role Ambiguity

A situation where an individual's job responsibilities, expectations, or authority are unclear, leading to confusion and potential stress.

Conflicts

Occur when there are opposing ideas, interests, or needs, leading to a disagreement or struggle between two or more parties.