Question

Assume that there is an improvement in the technology used by firms in a perfectly competitive industry that is initially in long-run equilibrium. In the short run this would cause:________
A) Cannot be determined with the information given.
B) An increase in the firm's economic profit.
C) No change in the firm's economic profit.
D) A decrease in the firm's economic profit.

Answer 1

Answer:

B) An increase in the firm's economic profit.

Explanation:

An increment in the firm's economic gain. Primarily an economic gain or loss exists the contrast betwixt the taxation received from the sale of an output furthermore some expenses of total inputs managed moreover unspecified contingency expenses. In determining financial gain, contingency expenses and specific expenses stay subtracted from taxation received. Because cost equates minimal taxation, an unprecedented acceleration in a specific rate indicates marginal taxation increases. Essentially a conclusion, all firm actuates up its marginal price curve moreover enhances the amount it generates. If a specific firm had continued gaining zero economic gain before significant increment in demand, subsequent these raises the firm acquires an economic profit.