In a Perfectly Competitive Long-Run Constant-Cost Industry, an Increase in Market

question 74

Multiple Choice

In a perfectly competitive long-run constant-cost industry, an increase in market demand causes:

• A) an increase in quantity, a decrease in price, and no change in profit in the long run.
• B) an increase in price, quantity, and profit in the long run.
• C) an increase in quantity, no change in price, and no change in profit in the long run.
• D) a decrease in price, a decrease in quantity, and a decrease in profit in the long run.

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Definitions:

Resource Market

A marketplace where productive resources (like labor, capital, and raw materials) are bought and sold.

Product Market

A Product Market is a marketplace where final goods or services are offered to consumers, businesses, and the public sector.

Circular Flow Model

An economic model that describes the movement of money, goods and services, and resources between producers and consumers in the economy.

Entrepreneurial Ability

The skill to innovate, introduce new products or processes, and successfully manage business ventures.