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Unformatted text preview: c. increase the price it is charging for output d. shut down 4. Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product. Ultimately, the new long-run equilibrium will have a. fewer firms. b. more firms. c. the same number of firms. d. probably have a different number of firms, but it is not possible to determine if there will be more or fewer firms. 5. The above figure shows the short-run cost curves for a perfectly competitive firm. Suppose that the market price is $3. Then a. economic profit is positive b. if the firm produces, then the firm incurs a loss that can be computed as follows: ($5.50 - $3) x 50 c. the firm incurs a loss equal to its fixed costs d. Both b. and c. are correct. 2...
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- Spring '11