What is the difference between the short run and the long run as economists define the two?
The short run is a period of time within which at least one resource is fixed. It could be a commitment for a rental lease, for example. The short run is also a period too short for new firms to enter the industry or for firms currently in the industry to exit. For the long-run period, all resources may vary; hence, all costs are variable costs. New firms may enter the industry and old firms may exit.
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Consider two industries in which firms hold the following market shares: Industry A: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1% Industry B: 30%, 10%, 9%, 8%, 8%, 8%, 8%, 6%, 6%, 5%, 2% What are the concentration ratios for each industry? Which is more competitive?
"All else constant, consumers will purchase more of a good as the price falls." This statement reflects the behavior underlying:
A. a change in supply. B. the supply curve. C. the demand curve. D. a change in demand.