8. As a result of the short run effect on the wool sock industry
caused by global warming, the adjustment to long run equilibrium
will consist of:
- firms entering the industry due to increased profits, shifting
the marginal and average total cost curves out until profits are
zero.
- firms leaving the industry due to losses, shifting the marginal
and average total cost curves out until profits are zero.
- firms leaving the industry due to losses, shifting the industry
supply curve out until prices fall enough to ensure zero profits.
- firms leaving the industry due to losses, shifting the industry
supply curve back until prices rise enough to ensure zero profits.
- firms entering the industry due to increased profits, shifting
the supply curve out until profits are zero.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved