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:

Chi-squared Test

An analytical procedure utilized to check for a significant connection between two variables that are categorized.

Categories

Distinct groups or classifications into which data or objects can be organized.

Normal Distribution

A bell-shaped frequency distribution curve that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Goodness-of-fit Test

A statistical test used to determine if a set of observed frequencies differs significantly from the expected frequencies.