How is the short run response to a change in demand or cost ...

[karateprodigy]

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]

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