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Author Question: If firms in a competitive market have different cost functions, then A) there is no short run ... (Read 46 times)

savannahhooper

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on: Jul 1, 2018
If firms in a competitive market have different cost functions, then
 
  A) there is no short run market supply curve.
  B) the market supply curve reflects those firms' operating envelopes, even in the short run.
  C) some of the firms will shut down because their costs are too high to compete.
  D) the firms' marginal costs will be different at the market price.

Question 2

The length of the short-run is the same for all firms.
 
  Indicate whether the statement is true or false


meow1234

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

False. Firms differ in their ability to change the amount of capital they employ. Therefore, the short-run period is likely different for firms in different industries.


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