Question

Assume new machines have a new cost-saving technology that is not in older machines. What characteristics is true of a perfectly competitive industry which is in the period of adjustment to this new technology?

Answer 1

The correct option is (3) At the end of the adjustment period the newer-technology firms will be making economic profit because costs are lower.

Step-by-step explanation:

According to the given scenario, in the case when the new machine have a saving technology with respect to the cost as compared with the older machines so here the attribute that should be true with regard perfect competitive industry is that at the closing period of adjustment the new technology firm would earned more economic profit as there is a lesser cost compared with the older technology firm

Therefore the correct option is (3)