In a perfectly competitive market, the firms are observed to make negative economic profits in (39) the market. Supply will (41). Hence profits will continue until the market equilibrium price corresponds to the minimum of the the short run. Hence, firms equilibrium price will, _(40). Market (42). The process will _(43) function. 39. a) enter b) exit 40. a) increase b) decrease 41. a) increase b) decrease 42. a) decrease b) increase 43. a) long run average cost b) long run marginal cost

In a perfectly competitive market, the firms are observed to make negative economic profits in (39) the market. Supply will (41). Hence profits will continue until the market equilibrium price corresponds to the minimum of the the short run. Hence, firms equilibrium price will, _(40). Market (42). The process will _(43) function. 39. a) enter b) exit 40. a) increase b) decrease 41. a) increase b) decrease 42. a) decrease b) increase 43. a) long run average cost b) long run marginal cost

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.14P

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