Refer to the Graphs Shown, Which Depict a Perfectly Competitive

question 70

Multiple Choice

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

• A)market price rises from P₀ to P₁ and the firm's output rises from q₀ to q₁.
• B)market price rises from P₀ to P₁ and the firm's output rises from Q₀ to Q₁.
• C)market price remains at P₀ because perfectly competitive firms can't earn positive economic profit.
• D)the firm's output remains at q₀ because perfectly competitive firms can't earn positive economic profit.

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Definitions:

Roman Catholic Church

The largest Christian church, led by the Pope, with a rich history and tradition dating back to the times of Jesus and the Apostles.

Rome

The capital city of Italy, rich in history and home to numerous archaeological and artistic treasures, pivotal in the development of Western civilization.

Cathedral of Florence

A renowned Gothic-style cathedral in Florence, Italy, known for its massive dome engineered by Filippo Brunelleschi.

Arnolfo di Cambio

A prominent Italian architect and sculptor of the late 13th to early 14th century, known for his work on the Florence Cathedral.