1) If demand surges, industry-wide output will rise IN THE LONG RUN due to... an
ID: 1200503 • Letter: 1
Question
1) If demand surges, industry-wide output will rise IN THE LONG RUN due to...
an increase in the number of firms within the industry
an increase in the profit-maximizing level of output for each firm
an increase in efficiency
an increase in the number of firms within the industry AND in the amount produced by each firm.
2)In our purely competitive market model, we have assumed all of the following EXCEPT...
each firm has a very small market share
some non-price competition may occur
there are barriers to entry and exit from the industry
each firm's output level is not fixed in the short-run
all firms have no (significant) market power
3)If demand surges and pushes up the market price to $20, industry-wide output will rise IN THE SHORT RUN due to...
an increase in the number of firms within the industry
an increase in the amount that each profit-maximizing firm will produce
an increase in the ATC of production
an increase in the number of firms within the industry AND in the amount that each firm will produce.
an increase in the number of firms within the industry
an increase in the profit-maximizing level of output for each firm
an increase in efficiency
an increase in the number of firms within the industry AND in the amount produced by each firm.
Explanation / Answer
1) an increase in the number of firms within the industry
2) there are barriers to entry and exit from the industry
3) an increase in the amount that each profit-maximizing firm will produce
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