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03-21-2008, 09:17 AM
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| Basic Economics... I need help? 1)supper the milk industry Is characterized by perfect competition and is in long run equilibrium. As a result of change in the price of orange juice, a substitute for milk, the demand curve for milk shifts out. If milk is a decreasing-cost industry, what will happen in the long run? a)the price of milk will decrease at first but then return to the original price. b)the price of milk will decrease c)the price of milk will increase d)the price of milk will stay the same 2)If a perfect competition industry is constant cost, then if the demand curbe shifts out, the new long run equilibrium price a)will be the same as the original long-run equilibrium price b)could increase or decrease compared to the original long-run equilibrium price c)will be higher than the original long-run equilibrium price. d) will be lower than the original long-run equilibrium price.      |
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