Consider a Perfectly Competitive Industry in a Long-Run Equilibrium

question 87

Multiple Choice

Consider a perfectly competitive industry in a long-run equilibrium. If a single firm in that industry discovers a significant cost-saving production technology, then:

• A)all firms in the market will earn an economic profit in the short run.
• B)the rest of the industry will quickly adopt the new technology.
• C)the firm will earn an economic profit in the long run.
• D)all the firms in the market will earn an economic profit in the long run.

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Definitions:

Performance Standards

Benchmarks established to measure the quality, efficiency, and effectiveness of an organization's operations, products, or services.

Corrective Action

A process or set of measures taken to rectify a problem or address a non-conformity in procedures or practices.

SWOT Analysis

A strategic planning tool that evaluates the Strengths, Weaknesses, Opportunities, and Threats of an organization or project.

Opportunity Costs

The lost potential gain from other options when one option is chosen.