Asked by
Gilberto Gomez
on Dec 05, 2024
Verified
(Table: Cherry Farm) Use Table: Cherry Farm.Suppose there are 100 farms in this industry with identical cost curves,as shown in the table.If the price is $3.60 per pound:
A) firms will enter the industry.
B) firms will exit the industry.
C) the industry is in long-run equilibrium.
D) no firms will produce in the industry in the short run.
Long-run Equilibrium
The state in which all factors of production and costs are variable, and firms make neither excess profit nor losses, indicating stability in the market.
Perfectly Competitive
A market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, and perfect information, resulting in firms being price takers.
Price
The amount of money required to purchase a good or service; the value that must be exchanged to acquire a specific product.
- Clarify the significance of the entry and exit of companies in a perfectly competitive market and its repercussions on long-term market balance.
- Forecast market responses to cost and demand variations over short and extended periods.
Verified Answer
MB
Learning Objectives
- Clarify the significance of the entry and exit of companies in a perfectly competitive market and its repercussions on long-term market balance.
- Forecast market responses to cost and demand variations over short and extended periods.