Suppose the Dry Cleaning Industry Is Initially in Long-Run Equilibrium

question 49

Multiple Choice

Suppose the dry cleaning industry is initially in long-run equilibrium but then experiences a sharp increase in the price of its inputs. Assuming that the industry is perfectly competitive, the increase in costs should:

• A) decrease the number of firms in the industry in the long run and raise the market price.
• B) increase the number of firms in the industry in the industry and raise the market price.
• C) decrease the number of firms in the industry in the long run and reduce the market price.
• D) increase the number of firms in the industry in the industry and reduce the market price.

Learn about the voting patterns and political alignments in U.S. history.

Analyze the influence of demographic factors on voting behavior in the U.S.

Understand the fundamental principles of the gate-control theory of pain.

Recognize the influence of cognition and social-cultural factors on sensory experiences and pain perception.

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Definitions:

Land

In addition to the part of the earth’s surface not covered by water, this term refers to any and all natural resources (“free gifts of nature”) that are used to produce goods and services. Thus, it includes the oceans, sunshine, coal deposits, forests, the electromagnetic spectrum, and fisheries. Note that land is one of the four economic resources.

Demand Curve

A curve that illustrates the demand for a product by showing how each possible price (on the vertical axis) is associated with a specific quantity demanded (on the horizontal axis).

Economic Rent

The price paid for the use of land and other natural resources that are in fixed (perfectly inelastic) supply.

Antipoverty Programs

Governmental or non-profit organization initiatives designed to reduce or eliminate poverty by providing financial assistance, education, or job training.