If Demand Increases and Supply Decreases, Then the

question 25

Multiple Choice

If demand increases and supply decreases, then the

• A)equilibrium price rises but the effect on the equilibrium quantity is unknown.
• B)equilibrium quantity increases but the effect on the equilibrium price is unknown.
• C)equilibrium price falls but the effect on the equilibrium quantity is unknown.
• D)effect on both equilibrium price and quantity is unknown.
• E)equilibrium quantity decreases but the effect on the equilibrium price is unknown.

Understand the differences between industry and individual firm demand curves in perfect competition.

Identify the profit-maximizing/loss-minimizing level of output.

Recognize barriers to entry and exit in perfect competition, such as licenses, contracts, and patents.

Interpret short-run and long-run profit scenarios for firms in perfect competition.

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Definitions:

Learning Outcomes

The knowledge, skills, attitudes, and values that learners are expected to achieve as a result of undergoing specific educational activities.

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An individual's belief in their capacity to execute behaviors necessary to produce specific performance attainments.

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The capacity to link together a series of actions or learning steps into a coherent and successful sequence.

Self-Awareness

The conscious knowledge of one’s own character, feelings, motives, and desires.