Initially,a Perfectly Competitive Market That Has 1,000 Firms Is in Long-Run

question 10

Multiple Choice

Initially,a perfectly competitive market that has 1,000 firms is in long-run equilibrium.Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good.In the short run,the price ________,firms with the new technology make ________ economic profit,and firms with the old technology ________.

• A)remains the same;zero;incur an economic loss
• B)remains the same;positive;break even
• C)falls;positive;incur an economic loss
• D)remains the same;positive;incur an economic loss
• E)falls;break even;incur an economic loss

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Definitions:

Assembly Time

The total time taken to put together the components of a product, crucial in manufacturing for planning, efficiency improvement, and cost estimation.

Learning Percentage

Refers to the rate at which learning or improvement occurs over time, often applied in the context of labor efficiency and cost reduction.

Operations Management

The field of management focused on designing and overseeing the production process, as well as improving business procedures in the creation of goods or services.

Learning Rate

The rate at which learning or improvement occurs, often used in the context of cost reduction or efficiency improvement over time.