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Which of the following is an example of a long-run adjustment in a firm's production process?
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11. Perfect Competition
Long Run Equilibrium
Multiple Choice
How does a technological improvement affect competitive firms?
A
It raises firms' marginal and average costs, decreasing supply and increasing the equilibrium price.
B
It permanently increases firms' economic profits without affecting market price or inducing entry.
C
It reduces firms' costs, shifts market supply right, causes a lower equilibrium price and short-run profits that are competed away in the long run.
D
It shifts the market demand curve right, increasing both the equilibrium price and industry output.
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