Initially, a perfectly competitive market that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good. Which of the following events occur in the short run?
The market price ________, firms with the new technology make ________ economic profit, and firms using the old technology ________.

Question

Initially, a perfectly competitive market that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good. Which of the following events occur in the short run? 
 The market price ________, firms with the new technology make ________ economic profit, and firms using the old technology ________.

Answer

remains the same; positive; incur an economic loss

Answer

remains the same; positive; break even

Answer

falls; positive; incur an economic loss

Answer

falls; break even; incur an economic loss

Answer

remains the same; zero; incur an economic loss

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Initially, a perfectly competitive market that has 1,000 firms is in long-run eq...

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