An Increase in the Price of a Variable Input Employed

question 63

Multiple Choice

An increase in the price of a variable input employed in a perfectly competitive industry will:

• A)shift the short run industry supply curve up and to the left.
• B)have no effect on supply under fixed proportions production.
• C)reduce the amount produced by each firm in long- run equilibrium.
• D)have no effect on long- run equilibrium price under constant- costs.

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Definitions:

Optimal Levels

The most favorable or desired measure of performance or results, ensuring the highest degree of efficiency, effectiveness, or well-being.

Mutual Goals

Objectives agreed upon by all parties involved, aiming for a common outcome or benefit.

Outcomes

The results or consequences of a particular process, action, or situation.

Chronic Nature

Characteristics of an illness or condition that persists over a long period of time, often with slow progression.