In the Long Run,which of the Following Is True

question 110

Multiple Choice

In the long run,which of the following is true?

• A)Profit effects are equal to cost effects.
• B)Profit effects are larger than cost effects.
• C)Cost effects are larger than profit effects.
• D)None of the choices are correct.

---

Definitions:

Substitution Effect

A concept in economics describing the change in consumption resulting from a change in the price of one good relative to the price of other goods.

Giffen Goods

A type of good for which demand increases as the price increases, and falls when the price decreases, violating the basic law of demand in economics.

Law of Demand

A fundamental principle stating that all else being equal, as the price of a good increases, the quantity demanded of that good decreases, and vice versa.

Marginal Utilities

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.