Under perfect competition, if an industry is characterized by ...

[Frost2351]

Under perfect competition, if an industry is characterized by positive economic profits in the short run
 a. firms will leave the market in the long run and the short-run supply curve will shift outward.
  b. firms will enter the market in the long run and the short-run supply curve will shift outward.
  c. firms will enter the market in the long run and the short-run supply curve will shift inward.
  d. firms will leave the market in the long run and the short-run supply curve will shift inward.

Question 2

Suppose that the price elasticity of demand for a product is 1 and that the price elasticity of supply is +1 . Assume also that the income elasticity of demand is +2 . Then an increase in income of 10 will raise equilibrium price by
 a. 10.
  b. 5.
  c. 20.
  d. an annual amount that cannot be determined.

[mtmmmmmk]

Answer to Question 1

b

Answer to Question 2

a

[Frost2351]

YES! Correct, THANKS for helping me on my review

[amandalm]

Thanks for the timely response, appreciate it