A Perfectly Competitive Firm in a Constant-Cost Industry Produces 3,000

question 211

Multiple Choice

A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at a total cost of $36,000.The prevailing market price is $15.What will happen to the number of firms in the industry and to the industry's output in the long run?

• A)The number of firms and the industry's output increase.
• B)The number of firms and the industry's output decrease.
• C)The number of firms remains constant and the industry's output increases.
• D)The number of firms remains constant and the industry's output decreases.

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Definitions:

One-Year Rule

A legal provision in contract law stating that contracts which cannot be performed within one year must be in writing to be enforceable.

Oral Contract

An agreement between parties that is spoken, not written, but is still legally binding.

Milkshake Mixer

A kitchen appliance designed specifically for blending and mixing milkshake ingredients to create a smooth, evenly mixed beverage.

Enforceable

Capable of being imposed or compelled by legal means or authority.