If You Were to Put the Following Effects of a Decrease

question 12

Multiple Choice

If you were to put the following effects of a decrease in demand into the sequence in which they occur, which would be last?

• A)The demand curve facing each individual firm drops.
• B)Each firm reduces quantity supplied to the point where marginal cost equals its now-lower marginal revenue.
• C)In the short run, the market price drops.
• D)Market output falls.
• E)A short-run loss forces some firms out of business in the long run.

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Definitions:

Black Box

A system or object whose internal workings or operation are not revealed or understood but only its inputs and outputs are observable.

Stimulus-Response Model

A theoretical framework in psychology that explains how individuals respond to external stimuli.

Consumer Behavior

The study of how individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences.

Target Markets

Specific groups of potential customers that businesses aim to reach with their products, services, and marketing efforts.