There Is a Technological Advance in a Perfectly Market

question 337

Multiple Choice

There is a technological advance in a perfectly market. Which of the following statements is NOT true?

• A) As more firms begin to use the new technology, the market supply increases and the price falls.
• B) Technological change brings permanent gains to producers and temporary gains to consumers.
• C) In the new long-run equilibrium, all the old-technology firms have exited.
• D) In the long-run equilibrium, competition eliminates any short-run economic profit.

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Definitions:

Fixed Assets

Long-term assets that a company uses in the production of its goods and services, such as buildings, machinery, and equipment, which are not expected to be converted into cash in the short term.

Investing Activity

Financial transactions related to an entity's investments in long-term assets, including property, plant, equipment, and securities.

Capital Stock

The total amount of common and preferred shares that a company is authorized to issue, representing the equity ownership of the company.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits, and distributed proportionally to the amount of shares owned.