Refer to the Graphs Shown, Which Depict a Perfectly Competitive

question 99

Multiple Choice

Refer to the graphs shown, which depict a perfectly competitive market and firm in a constant-cost industry. If market demand increases from D₀ to D₁, in the long run:

• A) new firms will enter this market and price will return to P₀.
• B) new firms will enter this market and price will remain at P₁.
• C) some firms will exit this market and price will return to P₀.
• D) some firms will exit this market and price will remain at P₁.

---

Definitions:

Standard Deviation

A statistical indicator that quantifies the spread of scores or values around the mean in a dataset, illustrating the variability or consistency among the data.

Fresh Gallon

A measurement indicating a gallon of a freshly produced or provided liquid, such as milk or paint.

Safety Stock

Additional inventory kept to reduce the risk of stockouts.

Service Level

A measurement of the quality and efficiency of a service, often evaluated based on factors such as speed, reliability, and customer satisfaction.