Exam 11: Pure Competition in the Long Run

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be

The economic profits generated by Elon Musk's series of innovations are most threatened by

Suppose that the corn market is purely competitive. If the corn farmers are currently earning negative economic profits, then we would expect that in the long run the market

Allocative efficiency occurs whenever

When a purely competitive industry is in long-run equilibrium, which statement is true?

The long-run supply curve under pure competition is derived by observing what happens to market price and quantity when market

The process by which new firms and new products destroy existing dominant firms and their products is called creative destruction.

If firms enter a purely competitive industry, then in the long run this change will shift the industry

Assume a purely competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in demand occurs. After all the long-run adjustments have been completed, the new equilibrium price

The long-run supply curve for a purely competitive industry would be horizontal when

List at least three of the companies created by the well-known entrepreneur, Elon Musk.

An increasing-cost industry is associated with

Refer to the accompanying graphs for a competitive market in the short run. Which of the following statements is true?

Which of the following statements about a competitive firm is correct?

A purely competitive firm is precluded from making economic profits in the long run because

In the long run for a purely competitive market, firms may enter or exit the industry, but the firms that stay in the industry will maintain their initial plant sizes.

What happens in a decreasing-cost industry when some firms leave and the industry's output contracts?

Refer to the accompanying graphs for a competitive market in the short run. What will happen in the long run to industry supply and the equilibrium price, P, of the product?

Creative destruction entails both costs as well as benefits to society.

Refer to the diagrams, which pertain to a purely competitive firm producing output q and the industry in which it operates. In the long run we should expect