Asked by
Maura Acosta
on Dec 12, 2024
Verified
Suppose that competitive price-searcher firms are earning positive profits. In the transition from this initial situation to a long-run equilibrium,
A) the number of firms in the market decreases.
B) each existing firm experiences a decrease in demand for its product.
C) each existing firm experiences a rightward shift of its marginal revenue curve.
D) each existing firm experiences an upward shift in its average total cost curve.
Competitive Price-searcher
A firm operating in a market where it must search for the optimal price that balances its desire for profits with the need to remain competitive.
Long-run Equilibrium
A state in which all firms in a market are making zero economic profit, leading to an optimal allocation of resources.
- Expound on the influence of entry and exit activities on the equilibrium of the market and the financial success of firms in competitive price-searcher markets.
- Assess the impact of minimal barriers to market entry on the organization of markets and financial outcomes for firms.
Verified Answer
TD
Learning Objectives
- Expound on the influence of entry and exit activities on the equilibrium of the market and the financial success of firms in competitive price-searcher markets.
- Assess the impact of minimal barriers to market entry on the organization of markets and financial outcomes for firms.
Related questions
Because Barriers to Entry Are Low in Competitive Price-Searcher Markets ...
The Fact That Barriers to Entry Are Low in Competitive ...
A Competitive Price-Searcher Market Is Characterized by Firms ...
Which of the Following Is True for Firms That Produce ...
The Free Entry and Exit of Firms in a Competitive ...