Graph 14-8 -Refer to Graph 14-8. If the Market Starts in Equilibrium

question 37

Multiple Choice

Graph 14-8

-Refer to Graph 14-8. If the market starts in equilibrium at point C in panel (b) , a decrease in demand will ultimately lead to:

• A) more firms in the industry, but lower levels of production for each firm
• B) a new long-run equilibrium at point D in panel (b)
• C) fewer firms in the market
• D) none of the above

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Definitions:

Renaissance Fair

A festival that recreates the atmosphere of the European Renaissance with performances, arts, crafts, and food reflective of the time period.

Efficient Market

A market in which asset prices fully reflect all available information.

Profit Opportunities

Situations or circumstances where businesses can generate earnings that are above the normal expected returns.

Opportunity Costs

The value of the next best alternative that is foregone when a particular decision is made.