Suppose There Is a Large and Permanent Increase in the Demand

question 122

Multiple Choice

Suppose there is a large and permanent increase in the demand for a good produced in a competitive industry. We should expect that:

• A) existing firms will face lower sunk costs.
• B) competition in the industry will decrease.
• C) existing firms' average cost curves will shift upwards.
• D) firms will enter the industry because the market price will rise.

---

Definitions:

Enslaved Women

Women who were subjected to slavery, deprived of personal freedom and forced to perform labor or services against their will, historically and across various cultures.

Large Plantations

Extensive farms in the pre-Civil War South, often where enslaved people were forced to work.

Slave Hiring

A system wherein slaveowners leased out their slaves to work for others, typically for a specified period, with wages paid to the owner rather than the slave.

Southern Mores

Traditional customs, practices, and values specific to the Southern United States, often associated with hospitality and conservatism.