Firms in a Perfectly Competitive Industry Are in Long-Run Equilibrium

question 106

Multiple Choice

Firms in a perfectly competitive industry are in long-run equilibrium.A new technology becomes available that lowers production costs.Choose the statement that is incorrect.

• A)The first firms to use the new technology make an economic profit.
• B)As more firms begin to use the new technology,market supply increases.
• C)Firms that use the old technology incur economic losses.
• D)Old technology firms exit the market.
• E)In the long run,price is equal to average variable cost.

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Definitions:

Coefficient Of Correlation

A numerical measure that quantifies the degree to which two variables are linearly related.

Regression Line

A line that attempts to predict the relationship between two variables by minimizing the distance between the line and all the data points.

Slope

In the context of linear regression, it's the angle of the line of best fit, showing the rate of change between variables.

SSE

The sum of squared errors between observed and predicted values in statistical models, indicating the model's accuracy.