If the Demand Curve in a Constant Cost Market Shifts

question 54

Multiple Choice

If the demand curve in a constant cost market shifts up and to the right, then:

• A)the long run price stays the same and the long run quantity goes up.
• B)the short run price goes up and the short run quantity goes down.
• C)the short run price stays the same and the long run quantity goes up.
• D)the long run price stays the same and the long run quantity goes down.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in a public market.

Stock Split

A corporate action that increases the number of shares outstanding by issuing more shares to current shareholders, typically to make the stock more affordable.

Stockholders' Equity

The portion of the balance sheet that represents the owners' interest in the corporation, calculated as total assets minus total liabilities.

Cash Dividends

Payments made by a corporation to its shareholders from its profits in the form of cash.