Author Question: A perfectly competitive industry is in long-run equilibrium. Some firms in the industry adopt new ... (Read 109 times)

bobypop · **on:** Jun 29, 2018

A perfectly competitive industry is in long-run equilibrium. Some firms in the industry adopt new technology that reduces the average total cost of producing the good.

In the long run, the price is ________, firms with the new technology make ________ economic profit, and firms with the old technology ________. A) lower; zero; exit the industry
B) constant; a positive; make zero economic profit
C) lower; zero; switch to the new technology or exit the industry
D) constant; zero; exit the industry

Question 2

The price effect refers to how changes in

A) price affect real income.
B) price affect the quantity of a good consumed.
C) income affect prices.
D) preference affect prices.