Multiple Choice
If an industry that experiences external economies is in a long-run equilibrium, then an increase in market demand causes
A) a decrease in price in the short run, with the price returning to its former level in the long run.
B) an increase in price in the short run, with the price returning to its former level in the long run.
C) an increase in price in the short run, but the price falls below its former level in the long run.
D) an increase in price in the short run, with the price rising above its former level in the long run.
E) nothing to change in the market.
Correct Answer:
Verified
Correct Answer:
Verified
Q80: List three reasons for the rise and
Q81: In the long run, an industry can
Q82: In the long run, if a firm
Q83: External diseconomies of scale occur when firm
Q84: If the government subsidizes the production of
Q86: When firms exit an industry,<br>A)firm profits typically
Q87: External economies of scale occur when<br>A)a firm's
Q88: In the long-run competitive equilibrium model, capital
Q89: Cost saving technologies result in an increase
Q90: If higher taxes raise the unit cost