10 terms

Quiz 5

Central New Mexico Community College (CNM) Mr. Simpson
For a purely competitive firm in long-run equilibrium
MR = MC = minimum ATC
Assume that the market for wheat is purely competitive. Currently, firms growing wheat are experiencing economic losses. In the long run, we can expect this market's
supply curve to decrease
Increasing-cost industries find that their costs rise as a consequence of an increased demand for their product because of
higher resource prices
The elimination of the market positions of firms and their products by new firms with new products and innovative ways of doing business would be most closely associated with the concept of
creative destruction
An economy is producing the goods most wanted by society when, for each and every good, its
price and marginal cost are equal
The long-run supply curve in a constant-cost industry will be
perfectly elastic
If there is an increase in demand for a product in a purely competitive industry, it results in a dynamic adjustment in which there is an industry
expansion that will end when the price of the product is equal to its marginal cost
The long-run supply curve under pure competition will be
horizontal in a constant-cost industry and up-sloping in an increasing-cost industry
The idea of the "invisible hand" operating in the competitive market system means that
there is a unity of private and social interests that promotes efficiency
When a purely competitive industry is in long-run equilibrium, which statement is true?
Firms in the industry are earning normal profits.