Suppose That Initially the Price Is $20 in a Perfectly

question 147

Multiple Choice

Suppose that initially the price is $20 in a perfectly competitive market.Firms are making zero economic profits.Then the market demand shrinks permanently,some firms leave the industry,and the industry returns to a long-run equilibrium.What will be the new equilibrium price,assuming cost conditions in the industry remain constant?

• A) $20
• B) $16
• C) Lower than $20 but exact value cannot be known without more information.
• D) Larger than $20 but exact value cannot be known without more information.

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Definitions:

Generalizable

The extent to which findings or results from a study can be applied to broader contexts outside of the original research setting.

Unconscious Mind

The unconscious mind consists of the processes in the mind that occur automatically and are not available to introspection, influencing feelings, thoughts, and behaviors.

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Specific descriptions of concepts involving observable, measurable conditions and the procedures used to produce or measure them, crucial for replicability in research.

Disconfirmable Hypotheses

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