Assume That a Perfectly Competitive Constant-Cost Industry Is in Long

question 87

Multiple Choice

Assume that a perfectly competitive constant-cost industry is in long run equilibrium when market demand suddenly increases.All of the following statements are correct,except:

• A) Existing firms will start to earn short run economic profit
• B) New firms will enter the market in the long run
• C) The market supply will shift to the right in the long run
• D) The market price is decreasing in the short run
• E) Any economic profit will be eliminated in the long run

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Definitions:

Positive Outcomes

Results or consequences that are desirable, beneficial, or have a good impact on individuals or groups.

Recognition Heuristics

A psychological strategy where a person makes a decision based on the recognition of one alternative over others, often used in situations involving uncertainty.

Economic Models

Simplified representations of complex economic processes used to predict and analyze economic outcomes.

Impulse Buying

The act of purchasing items on a whim without prior planning, often driven by emotions or immediate desires.