Author Question: How is the short run response to a change in demand or cost condition different from the long run ... (Read 42 times)

karateprodigy

  • Hero Member
  • *****
  • Posts: 550
How is the short run response to a change in demand or cost condition different from the long run response in a perfectly competitive market?

Question 2

Some competitive firms are willing to operate at a loss in the short run because their revenues are at least able to cover their variable costs.
 a. True
  b. False
  Indicate whether the statement is true or false



TDubDCFL

  • Sr. Member
  • ****
  • Posts: 357
Answer to Question 1

In the short run, the only response to a change in demand or cost conditions comes from firms already in the market. In the long run, profits will attract new entrants and losses will induce unprofitable firms to leave the market.

Answer to Question 2

True



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

The horizontal fraction bar was introduced by the Arabs.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

For a complete list of videos, visit our video library