Figure 6.5 -Figure 6.5 Shows the Short-Run and Long-Run Effects of an of an Increase

question 4

Multiple Choice

Figure 6.5
-Figure 6.5 shows the short-run and long-run effects of an increase in demand of an industry. The market is in equilibrium at point A, where 100 identical firms produce 6 units of a product per hour. If the market demand curve shifts to the right, what has happened to an individual firm's output level at point B?

• A) Each firm produces two more units per hour.
• B) Each firm produces relatively smaller level of output as more firms enter the market.
• C) Each firm will produce the same level of output.
• D) none of the above

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Definitions:

Binding Labor Agreement

A legally enforceable contract between a labor union and an employer that specifies the terms of employment and worker rights.

Formal Grievance Systems

Institutionalized processes allowing employees to file complaints or disputes for formal review and resolution.

National Labor Relations Board

An independent U.S. federal agency that enforces labor law in relation to collective bargaining and unfair labor practices.

American Federation of Labor

A national federation of labor unions in the United States, founded in 1886, representing workers' interests in various industries.