Title: Figure 9.5 shows the short-run and long-run effects of an increase in demand of an ...
Post by: PiMaster314 on Jul 22, 2019
Figure 9.5
Figure 9.5 shows the short-run and long-run effects of an increase in demand of an industry with increasing cost. The market is in equilibrium at point A, where 100 identical firms produce 6 units of a product per hour. If the market demand curve shifts to the right, what will happen to an individual firm's profit?
▸ Each firm earns a positive profit at point B.
▸ The profit of each firm decreases as more firms enter the market and share the benefits of an increase in demand pushing the market from point A to point B.
▸ Each firm earns a zero profit at point B because the market is perfectly competitive.
▸ none of the above
Title: Figure 9.5 shows the short-run and long-run effects of an increase in demand of an ...
Post by: aishasu on Jul 22, 2019
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Title: Figure 9.5 shows the short-run and long-run effects of an increase in demand of an ...
Post by: PiMaster314 on Jul 22, 2019
Appreciate the effort, thank you!