1. Short Run Suppose the book-printing industry is competitive and begins in a l
ID: 1103470 • Letter: 1
Question
1. Short Run Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books.Suppose Hi-Tech’s patent prevents other firms from using the new technology.
Which of the following statements true about what happens in the short run? (Check all that apply)
1. Hi-Tech’s marginal-cost curve remains the same. 2. Hi-Tech’s profits increase. 3. Hi-Tech’s average-total-cost curve shifts downward. 4. The price of books remains the same. 1. Short Run Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books.
Suppose Hi-Tech’s patent prevents other firms from using the new technology.
Which of the following statements true about what happens in the short run? (Check all that apply)
1. Hi-Tech’s marginal-cost curve remains the same. 2. Hi-Tech’s profits increase. 3. Hi-Tech’s average-total-cost curve shifts downward. 4. The price of books remains the same. Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books.
Suppose Hi-Tech’s patent prevents other firms from using the new technology.
Which of the following statements true about what happens in the short run? (Check all that apply)
1. Hi-Tech’s marginal-cost curve remains the same. 2. Hi-Tech’s profits increase. 3. Hi-Tech’s average-total-cost curve shifts downward. 4. The price of books remains the same.
Explanation / Answer
The correct options are:-
2. Hi-Tech’s profits increase.:- As Hi-Tech has the patent which prevents the implementation of technology by others thus the cost of production will do down resulting in greater profits.
3. Hi-Tech’s average-total-cost curve shifts downward:- Due to latest technology, cost of production will reduce making the average-total-cost curve to shift downward
4. The price of books remains the same:- In order to enjoy greater profits, the firm will not reduce the price of the books
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.