Assume That All Firms in This Industry Have Identical Cost

question 61

Multiple Choice

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. If the market supply curve is given by S1, then in the long run firms will:

• A)enter the market, leading the market supply curve to shift out to S3.
• B)enter the market, leading the market supply curve to shift out to S2.
• C)exit the market, leading the market supply curve to shift out to S2.
• D)neither enter nor exit the market, so the market supply curve will remain at S1.

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Definitions:

Hepatic Portal Vein

The hepatic portal vein is a blood vessel that carries nutrient-rich blood from the gastrointestinal tract and spleen to the liver for filtering and processing.

Superior Mesenteric Vein

A major vein draining blood from the small intestine, ascending colon, and part of the transverse colon.

Popliteal Vein

A vein located behind the knee that drains blood from the lower leg and transports it back towards the heart.

Saphenous Vein

The longest vein in the body, running along the length of the leg, and often used in coronary artery bypass surgery.