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Home Q & A Board Other Fields Homework Help Business Economics
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Mandolina Mandolina
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7 years ago
Suppose the firms in a purely competitive industry are in a long-run equilibrium when the industry experiences a reduction in demand. Which of the following will occur?
A) In the short run, firms will earn profits and will expand output; in the long run, additional firms will enter the industry until only a normal profit is earned.
B) In the short run, firms will incur losses but will continue to produce the same output; in the long run, firms will leave the industry until only a normal profit is earned.
C) In the short run, firms will earn profits and will contract output; in the long run, firms will leave the industry until the remaining firms can earn an economic profit.
D) In the short run, firms will incur losses and will contract output; in the long run, firms will leave the industry until the remaining firms can earn a normal profit.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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foliogefolioge
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Mandolina Author
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#2
7 years ago
Makes a ton of sense now Smiling Face with Open Mouth
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