Calculate new equilibrium price

Assignment Help Macroeconomics

Reference no: EM1369967

Assume that initially the price is $50 in a perfectly competitive market. Company are making zero economic profits. Then the market demand shrinks permanently and some firms leave the industry and the industry returns back to a long run equilibrium. What will be the new equilibrium price, assuming cost conditions in the industry remain constant?

a. $50.
b. $45.
c. Lower than $50 but exact value cannot be known without more information.
d. Larger than $45 but exact value cannot be known without more information.

Reference no: EM1369967

Questions Cloud

Return boolean value true if string in array is palindrome : Write the recursive method testPalindrome which returns boolean value true if string stored in array is palindrome and false otherwise. Method must ignore spaces and punctuation in string.

How management expects technology to improve business : Show how companies' current technology is meeting or not meeting business needs - Business Technology

Describe whether the resistance to change was caused : Describe whether the resistance to change was caused by an internal and Explain a situation where you or someone you know was resistant to change as identified in one of following areas

Determining total cost function : A Firm has total cost function given by following: What is the Total fixed cost when Q = 100? And Average fixed Cost when Q=100?

Calculate new equilibrium price : Assume that initially the price is $50 in a perfectly competitive market. Company are making zero economic profits.

Question on game theory : Two would-be wine makers are contemplating entering the low end wine market in country of Zuba. Two types of wine are being considered by both.

Value measure for true gdp measuring : Compute real GDP for 2004 and 2005 using 2004 prices. By what percent did real GDP grow? Compute the value of the price index for GDP for 2005 using 2004 as the base year. By what percent did prices increase?

Program to display employees-total hours in decreasing order : The following array stores work hours for eight employees, write program which display employees and their total hours in decreasing order of total hours.

Question about monopolistic competition : Ruby's Beauty College of Grand Forks, Nebraska, is one of many local beauty colleges each specializing in different haircutting techniques. Rubys Beauty College would become considered:

User Account

All Pages