Microeconomics

If the government regulates a natural monopoly by forcing the firm to

If the government regulates a natural monopoly by forcing the firm to set price equal to marginal cost, A) the firm will earn a negative economic profit. B) the firm will earn zero economic profit. C) the firm will earn a fair economic profit. D) the firm will earn a positive and large economic profit. […]

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Date: September 9th, 2020

Suppose the long-run supply curve for a perfectly competitive industry

Suppose the long-run supply curve for a perfectly competitive industry is horizontal at a price of $12, and the minimum short-run average variable cost for each of the identical N firms in the industry is $8. If the demand curve for the industry decreases so that it intersects the short-run supply curve of the industry […]

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Date: September 9th, 2020

If firms in a competitive market are identical, the long-run market su

If firms in a competitive market are identical, the long-run market supply curve is horizontal. Indicate whether the statement is true or false   ANSWER False. The horizontal long-run supply curve also requires that factor prices do not increase with industry expansion and that the number of firms is not restricted.  

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Date: September 9th, 2020