Reading 18: Perfect Competition - LOS c, (Part 2) ～ Q1-5

答案和详解如下：

1.For a perfectly competitive firm in the short-run, what will be the effect of an increase in market demand on equilibrium price and quantity?

A)                                        Increase      Decrease

B)                                        Decrease     Increase

C)                                        Decrease     Decrease

D)                                        Increase      Increase

The correct answer was D)

In the short run, an increase in market demand (a shift to the right) will increase both equilibrium price and quantity.

2.Firms in an industry characterized by perfect competition exit the market. What will be the effect on the equilibrium price and total revenue of the firms that remain in the industry?

A)                                        Increase      Decrease

B)                                        Decrease     Increase

C)                                        Decrease     Decrease

D)                                        Increase      Increase

The correct answer was D)

If firms in an industry are experiencing losses, some will exit. This will decrease industry supply and increase equilibrium price. The remaining firms in the industry will move up their individual supply curve and increase production at the higher price. This will cause total revenues to increase.

3.Which of the following is most likely the long-term adjustment in a perfectly competitive industry that is characterized by firms incurring economic losses?

A)   The industry supply curve will shift downward and to the right.

B)   Some existing firms will exit the market.

C)   Existing firms will increase output.

D)   Equilibrium price will decrease.

The correct answer was B)

Some of the existing firms will exit the market, leading to a decrease in industry supply and an increase in equilibrium price. Eventually, the remaining firms in the industry will increase output at the higher market price until economic profit equals zero.

4.If the market demand for a product increases in a competitive market, then price:

A)   and quantity will increase.

B)   and quantity will decrease.

C)   will increase and quantity will decrease.

D)   will decrease and quantity will increase.

The correct answer was A)    

If the market demand for a product increases in a competitive market, then the equilibrium price and equilibrium quantity supplied will increase.

5.Which of the following statements about supply curves is FALSE? The:

A)   long-run supply curve for constant cost industries is horizontal.

B)   long-run supply curve for increasing cost industries slopes upward to the right.

C)   long-run supply curve for decreasing cost industries slopes downward to the right.

D)   supply curve for the market is typically more elastic over the short run than the long run.

The correct answer was D)

The supply curve for products is typically more elastic over a longer time period than over a shorter period.