#16

The graphs show the unit cost curves of a representative rm in a constant cost industry and the market supply and demand curves when there are currently 100 rms in the industry. Unit Cost Curves of a Representative Firm Market Supply and Demand $ per unit P MC: 5100 frms P 1 A"; .............. ........................ ............ .MIL'1 C] The graph shows a market in long run equilibrium. C] At P1, exisiting rms are just breaking even and have no incentive to exit the industry. C] At P1, a condition of excess supply exists. C] At P1, a condition of excess demand exists. C] None of the answers are correct. O In the short run, the number of firms in the industry will decrease if existing firms are earning a profit. O In the short run, the number of firms in the industry will increase if existing firms are losing money. O In the short run, the number of firms in the industry will decrease if existing firms are losing money. O After the technological degredation, existing firms are making money at P1. After the technological degredation, existing firms are losing money at P1. O After the technological degredation, the short run industry supply curve will shift from the black curve to the blue curve because exisiting firms will increase output at P1. After the technological degredation, the short run industry supply curve will shift from the black curve to the blue curve because exisiting firms will decrease output at P1. O After the technological degredation, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are earning a profit and new firms will enter the industry. O After the technological degredation, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are losing money and firms will exit the industry. O After the technological degredation, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are earning a profit and firms will exit the industry. O After the technological degredation, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are making a profit and firms will exit the industry.The black lines show the unit cost curves of a representative rm in a constant cost industry and the market supply and demand curves when there are currently 100 rms in the industry. The black lines show an industry in long run equilibrium. Suppose there is a technological degradation. Unit Cost Curves of a Representative Firm $ per unit Market Supply and Demand C] A technological degradation means that the same amount of capital and labor produces more output. [3 A technological degradation means that the same amount of capital and labor produces less output. C] The technological degredation will shift the ATC from ATC1 to ATCZ. [j The technological degredation will shift the ATC from ATC1 to ATC3. C] In the short run, the number of rms in the industry is constant. C] In the short run, the number of rms in the industry will increase if existing rms are earning a prot. The black lines show the unit cost curves of a representative rm in a constant cost industry and the market supply and demand curves when there are currently 100 rms in the industry. The black lines show an industry in long run equlibrium. Suppose the price of labor or capital falls. Unit Cost Curves of a Representative Firm 5 per unit Market Suppiy and Demand C] A decrease in the price of capital or labor reduces the ATC of producing a given level of output. C] A decrease in the price of capital or labor increases the ATC of producing a given level of output. C] The decrease in the price of capital or labor will shift the ATC from ATC1 to ATC2. E] The decrease in the price of capital or labor will shift the ATC from ATC1 to ATC3. C] In the short run, the number of rms in the industry is constant. C] In the short run, the number of rms in the industry will increase if existing rms are earning a prot. O In the short run, the number of firms in the industry will decrease if existing firms are earning a profit. O In the short run, the number of firms in the industry will increase if existing firms are losing money. O In the short run, the number of firms in the industry will decrease if existing firms are losing money. After the decrease in the price of capital or labor, existing firms are making money at P1. O After the decrease in the price of capital or labor, existing firms are losing money at P1. O After the decrease in the price of capital or labor, the short run industry supply curve will shift from the black curve to the blue curve because exisiting firms will increase output at P1. O After the technological degredation, the short run industry supply curve will shift from the black curve to the blue curve because exisiting firms will decrease output at P1. O After the decrease in the price of capital or labor, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are earning a profit and new firms will enter the industry. O After the decrease in the price of capital or labor, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are losing money and firms will exit the industry. O After the decrease in the price of capital or labor, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are earning a profit and firms will exit the industry. O After the decrease in the price of capital or labor, the short run industry supply curve will shift from the blue curve to the green curve because exisiting firms are making a profit and firms will exit the industry.Consider how changes in the price of related goods and changes in income effect the demand curve for a good. _ _. 5mg Pm: Ehsumy of Dm-E,=I/Ap I , . . = 9mg, th Prune 13me % F: C Poeasdtpf Demand-El, = 3:}? Unit Cost Curves of a Representative Firm $ per unit Market Supply and Demand C] If the price of a complement rose, the demand curve would shift from D1 to D2. C] If the price of a substitute fell the demand would shift from D1 to D2, C] If the cross price elasticity was negative and the price of a related good fell, the demand curve would shift from D1 to D2. C] If the cross price elasticity was negative and the price of a related good fell, the demand curve would shift from D1 to D3. C] If income falls, the demand curve for an inferior good will shift from D1 to D2. C] If income falls, the demand curve for an inferior good will shift from D1 to D3. C] If income elasticity of demand is negative, and income falls the demand curve will shift from D1 to D2. C] If income elasticity of demand is negative, and income falls the demand curve will shift from D1 to D3. C] If two goods are complements and the good is inferior, a decrease in the price of a related good and a simultaneous decrease in income will cause the demand curve to shift from D1 to D2. C] If two goods are complements and one good is inferior, which way the demand curve will shift cannot be determined when there is a decrease in the price of a related good and a simultaneous decrease in income. The change in the price of the related good and the change in income cause the demand curve to shift in opposite directions so the net effect cannot be determined. C] If two goods are complements and the good is inferior, a decrease in the price of a related good and a simultaneous decrease in income will cause the demand curve to shift from D1 to D3. C] If the price of the good increases, the demand curve will shift from D1 to D2. C] If the price of the good increases, the demand curve will shift from D1 to D3. [3 If the price of the good increases, the demand for the good will shift from pointA to point B. C] If the price of the good increases and the demand for the good is inelastic, the demand for the good will shift from Point B to Point A. C] If the price of the good increases and the demand for the good is elastic, the demand for the good will shift from Point B to Point A