Figure 12-17 The Graphs in Figure 12-17 Represent the Perfectly Competitive Market

question 130

Multiple Choice

Figure 12-17

The graphs in Figure 12-17 represent the perfectly competitive market demand and supply curves for the apple industry and demand and cost curves for a typical firm in the industry.
-Refer to Figure 12-17.The graphs depict a short-run equilibrium.How will this differ from the long-run equilibrium? (Assume this is a constant-cost industry.)

• A)Fewer firms will be in the market in the long run than in the short run.
• B)The price will be higher in the long run than in the short run.
• C)The market supply curve will be further to the left in the long run than in the short run.
• D)The firm's profit will be lower in the long run than in the short run.

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Definitions:

Simultaneous Game

A strategic interaction (game) between two or more parties (players) in which every player moves (makes a decision) at the same time.

Collusive Oligopoly

A market condition where a small number of firms illegally agree to set prices or output levels to maximize collective profits.

Noncollusive Oligopoly

A market structure where a few firms dominate but do not explicitly coordinate their pricing and output decisions, leading to competitive but interdependent market outcomes.

Game Theory

A branch of mathematics and economics that studies the strategic interactions among rational decision-makers, aiming to predict their choices of action given the rules of the game and the actions of others.