Good Zis produced and sold in a competitive industry, and long-run industry supply is characterized by constant costs. The figure below shows a typical long-run average cost curve (LAC) for each of the firms producing good Z. LAC reaches its minimum unit cost of $12 and 1,000 units of output (point M. Suppose the demand for good Zis Qg 52,000 -1,000P. LAC M 12.00 Firm's output (q) 1,000 In long-run competitive equilibrium, if demand for good Z decreases, then LMC rises, stays the same), and economic profit (falls, rises, stays the same). LAC (talls, (falls, rises, stays the same). in iong-run competitive equionum, it oemana tor goo0 z oecreases, tnen LMU rises, stays the same), and economic profit (rais, nses, stays tne samej, LAL (rars, (falls, rises, stays the same). Multiple Choice remains the same, remains the same; remains the same remains the same, falls fals fals, fals, falls remains the same; falls remains the same. fals, falls remains the same Price and cost (dollars)

Good Zis produced and sold in a competitive industry, and long-run industry supply is characterized by constant costs. The figure below shows a typical long-run average cost curve (LAC) for each of the firms producing good Z. LAC reaches its minimum unit cost of $12 and 1,000 units of output (point M. Suppose the demand for good Zis Qg 52,000 -1,000P. LAC M 12.00 Firm's output (q) 1,000 In long-run competitive equilibrium, if demand for good Z decreases, then LMC rises, stays the same), and economic profit (falls, rises, stays the same). LAC (talls, (falls, rises, stays the same). in iong-run competitive equionum, it oemana tor goo0 z oecreases, tnen LMU rises, stays the same), and economic profit (rais, nses, stays tne samej, LAL (rars, (falls, rises, stays the same). Multiple Choice remains the same, remains the same; remains the same remains the same, falls fals fals, fals, falls remains the same; falls remains the same. fals, falls remains the same Price and cost (dollars)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.7P

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