Suppose a Perfectly Competitive Firm Is in Long-Run Equilibrium and There

question 55

Multiple Choice

Suppose a perfectly competitive firm is in long-run equilibrium and there is a decrease in demand.Suppose also that the firm operates in an industry in which the prices of productive inputs vary with the level of output,increasing when output increases and decreasing when output decreases.Which of the following will occur at the new long-run equilibrium?

• A)Price will be lower than it was at the initial long-run equilibrium.
• B)Price will be the same as it was at the initial long-run equilibrium.
• C)Price will be higher than it was at the initial long-run equilibrium.
• D)The industry supply function will shift to the right.

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Definitions:

Attraction

The interest or desire towards someone or something, often based on physical appearance, personality traits, or similarities.

Self-Disclosure

The act of revealing personal information about oneself to others, which can enhance intimacy in relationships.

Long-Lasting Ties

Enduring relationships or connections between individuals, groups, or entities that are characterized by loyalty and mutual support.

Financial Comparisons

The action of evaluating and contrasting financial metrics, statuses, or situations between two or more entities or over time.