In the short run, a seller _____, but in the long run, _____.
A)cannot differentiate its product; all sellers differentiate their products
B)can vary all its costs; the seller faces only fixed costs
C)faces a fixed number of rivals; the number of rivals can vary
D)faces no barriers to entry and exit; there are barriers to entry and exit

Question

Quizplus · Accepted Answer

In the short run, a seller faces a fixed number of rivals since it cannot easily enter or exit the market. However, in the long run, the number of rivals can vary as new firms enter or existing firms exit the market, leading to changes in competition. Therefore, option C is the correct choice. The other choices do not accurately describe the short run and long run behavior of a seller.

In the Short Run, a Seller _____, but in the Long