|17.||Assume that a perfectly competitive industry is operating at
its long run equilibrium. Then, the demand for its product
Which of the following best describes the SHORT RUN response?
17 C) market demand curve shift right infirm demand curve increase and output increase is due to increase in the supply of the goods in connection increase in the demand.
18 A) The firm will enter the industry
The supernormal profits attract new firm in the industry hence normal profit will arise in the long run
If the firm earns supernormal profit increase in th demand and supernormal profits attract new firm hence it leads to normal profit in the long run.
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