A Permanent Decrease in Demand for Convenience Store Services Is

question 149

Multiple Choice

A permanent decrease in demand for convenience store services is likely to cause which of the following in the long run?

• A)an economic loss for each firm
• B)a higher price for each firm's output
• C)fewer firms in the industry
• D)more firms in the industry
• E)economic profit for each firm

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Definitions:

Surplus

The situation in which the quantity supplied of a product exceeds the quantity demanded at a given price.

Excess Demand

A situation where the quantity demanded of a product exceeds the quantity supplied at a given price, often leading to price increases.

Rationing Mechanism

A system or method used to allocate scarce goods, services, or resources among people with competing demands.

Market Economies

Economic systems where decisions on production, investment, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.