This topic contains a solution. Click here to go to the answer

Author Question: Assume a firm is operating in a purely competitive market facing an upward-sloping long-run supply ... (Read 82 times)

abc

  • Hero Member
  • *****
  • Posts: 543
Assume a firm is operating in a purely competitive market facing an upward-sloping long-run supply curve.
 
  If the industry is currently making pure economic profit what adjustment processes would take place in this market? What would happen to the industry supply curve, equilibrium quantity and equilibrium price?

Question 2

If prices in the economy rise, then
 
  A) the purchasing power of a dollar stays constant.
  B) the purchasing power of a dollar rises.
  C) the purchasing power of a dollar declines.
  D) the purchasing power of a dollar cannot be determined.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

zacnyjessica

  • Sr. Member
  • ****
  • Posts: 345
Answer to Question 1

The economic profit would attract entry. However, as more firms enter the market this will drive up the costs of all the firms in the industry. This will then lead to a higher equilibrium quantity and a higher price in the market.

Answer to Question 2

C




abc

  • Member
  • Posts: 543
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


bassamabas

  • Member
  • Posts: 294
Reply 3 on: Yesterday
Gracias!

 

Did you know?

Atropine was named after the Greek goddess Atropos, the oldest and ugliest of the three sisters known as the Fates, who controlled the destiny of men.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Did you know?

Most women experience menopause in their 50s. However, in 1994, an Italian woman gave birth to a baby boy when she was 61 years old.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

Did you know?

Not getting enough sleep can greatly weaken the immune system. Lack of sleep makes you more likely to catch a cold, or more difficult to fight off an infection.

For a complete list of videos, visit our video library