A sudden increase in the market demand in a competitive industry leads to
a. Losses in the short-run and average profits in the long-run
b. Above average profits in the short-run and average profits in the long-run
c. New firms being attracted to the industry
d. Both B&C
QUESTION 2Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of 100 or a low-value of 70 with equal probability. If Anna receives 100 from the auction she can infer that
a. Both the bidders were high value bidders
b. Both the bidders were low value bidders
c. One of the bidders was high value, while the other was low value
d. All of the above
QUESTION 3A sudden decrease in the market demand in a competitive industry leads to
a. Losses in the short-run and average profits in the long-run
b. Above average profits in the short-run and average profits in the long-run
c. New firms being attracted to the industry
d. Demand creating supply
QUESTION 4Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of 100 or a low-value of 70 with equal probability. If Anna receives 70 from the auction, she can infer that
a. Both the bidders were high value bidders
b. Both the bidders were low value bidders
c. One of the bidders was high value, while the other was low value
d. All of the above
QUESTION 5A sudden decrease in the market demand in a competitive industry leads to
a. A market equilibrium price higher than the original equilibrium in the short-run
b. A market equilibrium price equal to the original equilibrium in the long-run
c. Both a and b
d. None of the above
QUESTION 6Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of 100 or a low-value of 70 with equal probability. If Anna receives 71 from the auction, she can infer that
a. Both the bidders were high value bidders
b. Both the bidders were low value bidders
c. One of the bidders was high value, while the other was low value
d. All of the above
QUESTION 7A sudden fall in the market demand in a competitive industry leads to
a. A short run market equilibrium price higher than the original equilibrium
b. A market equilibrium price higher than the short run price
c. New firms entering the market
d. All of the above
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