The Motivating Force Behind an Increase in Supply in a Long-Run

question 25

Multiple Choice

The motivating force behind an increase in supply in a long-run adjustment to equilibrium is

• A) lower prices.
• B) economic profits that are present in the short run.
• C) higher profit expectations among owners of firms in the industry, triggered by increased prices.
• D) normal profits witnessed by individuals outside the industry that trigger entry.
• E) the decreases in average cost that can be obtained through economies of scale.

Analyze the effects of compensation cost changes on the organization.

Recognize the challenges in planning for information technology within the context of compensation.

Develop strategies for introducing new compensation systems to employees.

Understand the key aspects and processes involved in implementing compensation systems.

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Definitions:

Mechanism Design

A field in economics and game theory that seeks to design rules or incentives for a system to achieve a desired objective, considering individuals' private information and incentives.

Welfare Policy

A governmental strategy designed to support the wellbeing of citizens, often through financial aid, healthcare, and education.

Health Insurance

A type of insurance that covers the whole or part of the risk of a person incurring medical expenses, spreading the risk over numerous individuals.

Adverse Selection

A situation in which sellers have information that buyers do not have, or vice versa, leading to an inefficient market outcome.