Refer to the table above. Now assume there are 100 identical firms in this industry, each of which has the same cost data as the single firm described above

33.

Refer to the table above. Now assume there are 100 identical firms in this industry, each of which has the same cost data as the single firm described above. Suppose too that the demand curve for this industry is as shown below:

The equilibrium price will be:

A)

$140.

B)

$180.

C)

$230.

D)

$290.

?

34.

Assume that the market for soybeans is perfectly competitive. Currently, firms growing soybeans are experiencing economic profits. In the long run, we can expect this market’s:

A)

supply curve to increase.

B)

demand curve to increase.

C)

supply curve to decrease.

D)

demand curve to decrease.

?

35.

Which of the following statements is correct?

A)

Economic profits induce firms to enter an industry; losses encourage firms to leave.

B)

Economic profits induce firms to leave an industry; profits encourage firms to leave.

C)

Economic profits and losses have no significant impact on the growth or decline of an industry.

D)

Normal profits will cause an industry to expand.

?

36.

A perfectly competitive firm, as shown below, will face what kind of change in profits over the long run, assuming industry demand is constant?

A)

Profits will increase.

B)

Profits will decrease.

C)

Profits will be unchanged.

D)

Cannot be decided from the information given.

?

37.

If a perfectly competitive constant-cost industry is realizing economic profits, we can expect industry supply to:

A)

increase, output to increase, price to decrease, and profits to decrease.

B)

increase, output to increase, price to increase, and profits to decrease.

C)

decrease, output to decrease, price to increase, and profits to increase.

D)

increase, output to decrease, price to decrease, and profits to decrease.

?

38.

Which of the following statements is correct?

A)

The long-run supply curve for a perfectly competitive increasing-cost industry will be upward sloping.

B)

The long-run supply curve for a perfectly competitive increasing-cost industry will be perfectly elastic.

C)

The long-run supply curve for a perfectly competitive industry will be less elastic than the industry’s short-run supply curve.

D)

The long-run supply curve for a perfectly competitive decreasing-cost industry will be upward sloping.

?

39.

One explanation for the existence of an increasing-cost industry is:

A)

increasing marginal returns to labour occur.

B)

firms produce beyond the point of minimum long-run average total costs.

C)

perfectly elastic long-run supply schedules are observed in the industry.

D)

as the industry expands, input prices are bid up for some factor of production.