When a Competitive Market Experiences an Increase in Demand That

question 191

Multiple Choice

When a competitive market experiences an increase in demand that induces an increase in producer costs, which of the following is most likely to occur?

• A)producer profits must fall in the long run
• B)the long-run market supply curve will be upward sloping
• C)the condition of free entry into the market will be violated
• D)all of the above are likely to occur

---

Definitions:

Usury Law

Regulations that cap the maximum interest rate that can be charged on loans, aimed at preventing exorbitant or unreasonable interest rates.

Quantity of Money

The quantity of money refers to the total amount of money, including cash and deposits, available in an economy at a particular time.

Unconscionably High Rates

Charges or fees that are excessively high and considered unreasonable or unethical, often in the context of lending or service provision.

Usury

The practice of charging exorbitantly high or illegal interest rates on loans.