Question

Initially, a perfectly competitive industry that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good. In the short run, the price ________, firms with the new technology make ________ economic profit, and firms with the old technology ________.

Answer 1

Answer:

B. falls; positive economic; incur economic losses

Explanation: A perfectly Competitive industry is a collection of firms who are producing similar products,these firms are known as price takers as the pressure from the market forces and other impacts that causes an change in price will affect them easily as they will have to take the price even when it is not favourable to their business, this is done in order to remain competitive and relevant in the market.