If There Is an Increase in Industry Supply While the Industry

question 334

Multiple Choice

If there is an increase in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning positive profits will see its profits

• A) increase.
• B) not change.
• C) decrease.
• D) impossible to determine

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Definitions:

Demand Falls

This occurs when there is a decrease in the desire or willingness of consumers to purchase a good at a given price, leading to potential shifts in the market equilibrium.

Economic Losses

Financial losses experienced by businesses or economies due to factors such as poor investments, natural disasters, or reduced consumer spending.

Pizza Suppliers

Businesses that supply pizza ingredients, equipment, or the pizza itself to consumers or other businesses.

Industry

A sector of the economy that produces goods or services, often categorized by similarity in the products or services they provide.