Question

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In perfect competition in​ long-run equilibrium, can consumer surplus or producer surplus be​ increased? Explain your answer.

In perfect competition in​ long-run equilibrium, consumer surplus or producer surplus​ _______ be increased because​ _______.

A.

​can; a rise in price increases producer surplus and a fall in price increases consumer surplus

B.

​cannot; to do so requires a movement away from the​ long-run equilibrium

C.

​can; producing more increases both consumer surplus and producer surplus

D.

​cannot; once a market reaches​ long-run equilibrium it cannot be changed

13...............

In the short​ run, the equilibrium quantity​ ______. Firms that adopt the new technology​ ______.

A.

​decreases; make an economic profit

B.

​decreases; incur an economic loss because technology is expensive

C.

​increases; make an economic profit

D.

​increases; incur an economic loss because technology is expensive

Answer 1

1) In perfect competition, the long run equilibrium is reached when the price = minimum ATC so it cannot be changed as the firms or consumers cannot deviate from this equilibrium level

option(B)

2) With the new technology, the firms will increase the output and make an economic profit as it lowers their cost

option(C)