Suppose That Each of 10,000 Perfectly Competitive Firm in an Industry

question 186

Essay

Suppose that each of 10,000 perfectly competitive firm in an industry produces 1,000 units of a good and earns an economic profit when the price of the good is $10.In the long run,definitely
A) each firm increases its production above 1,000 units.
B) the number of firms is more than 10,000.
C) consumer surplus decreases.
D) producer surplus increases.
E) the number of firms is less than 10,000.

• A) each firm increases its production above 1,000 units.
• B) the number of firms is more than 10,000.
• C) consumer surplus decreases.
• D) producer surplus increases.
• E) the number of firms is less than 10,000.

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Definitions:

Exchange Rate Risk

Exchange rate risk is the potential for investors to experience losses due to changes in the exchange rate between two currencies.

International Commerce

The exchange of goods, services, and capital across international borders or territories.

Industrially Developed Nations

Countries with significant industrialization, advanced technological infrastructure, and high levels of income and standard of living.

Labor Migration

The movement of people from one geographical area to another for the purpose of employment.