Suppose That a Competitive Market Is Initially in Equilibrium

question 510

Multiple Choice

Suppose that a competitive market is initially in equilibrium. Then demand increases. If entering firms face the same costs as existing firms and sufficient resources are available for entering firms,

• A)the long-run market supply curve will be upward sloping.
• B)the long-run market supply curve will be perfectly elastic.
• C)in the long run firms will suffer economic losses, leading them to exit the industry.
• D)the number of firms will decrease, and the market will become a monopoly.

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Social Stratification

The hierarchical arrangement and classification of individuals or groups in society based on their access to resources and social status.

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