Answer:
Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:leave the industry and price and output will both decline. TRUE, ECONOMIC PROFITS INDUCE FIRMS TO ENTER A MARKET, WHILE ECONOMIC LOSSES INDUCE FIRMS TO EXIT A MARKET. IF DEMAND FALLS, ECONOMIC LOSSES WILL RESULT.
When a purely competitive firm is in long-run equilibrium: price equals marginal cost. TRUE, COMPETITIVE FIRMS MAXIMIZE ACCOUNTING PROFITS WHEN MARGINAL REVENUE = MARGINAL COST
A purely competitive firm:cannot earn economic profit in the long run. TRUE, A COMPETITIVE FIRM CAN ONLY MAKE ECONOMIC PROFITS IN THE SHORT RUN, BUT ECONOMIC PROFITS IN THE LONG RUN = $0
A constant-cost industry is one in which:resource prices remain unchanged as output is increased. TRUE, FOR EXAMPLE AN INDUSTRY CAN PRODUCE 10 UNITS AT $10, 20 UNITS AT $20, 1,000 UNITS AT $1,000
An increasing-cost industry is associated with:an upsloping long-run supply curve. TRUE, THE LONG RUN SUPPLY CURVE FOR A PURELY COMPETITIVE INCREASING COST INDUSTRY WILL ALWAYS BE UPSLOPING.
Explanation:
