C8Practice - Practice Quiz on Chapter 8 True-False...

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Practice Quiz on Chapter 8 True-False Questions 1. The short-run industry supply curve is the industry supply curve obtained when fixed costs cannot be changed and the number of firms in the industry is also unchanged. Answer: True 2. When an industry is in long-run competitive equilibrium, price must be equal to variable cost. Answer: False Multiple Choice Questions 3. Demand for haircuts in the city of San Barberia is given by the function P=39-Q/20, where Q is the number of haircuts per day and P is the price of a haircut. Everyone who opens a barber shop in town has a fixed cost of $200 per day which must be paid so long as a shop is in business and regardless of the number of haircuts it sells. There is also a variable cost of $4 for each customer served. Each barber shop has a capacity of 40 customers per day. San Barberia currently has 12 barbershops. A barber shop that is open cannot escape its fixed costs immediately, but must give 6 months notice to its landlord of its intention to close. It also takes about 6 months to organize and open a new barber shop. The short run supply curve for haircuts in San Barberia consists of (a) a vertical segment extending from the origin to the point (0,4) and an unbounded horizontal line extending to the right of the point (0,4)
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C8Practice - Practice Quiz on Chapter 8 True-False...

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