Suppose That Demand Increases

question 81

Multiple Choice

Suppose that demand increases. If the total cost curves for the firms do not change with the number of firms:

• A) the minimum average total cost, equilibrium price, output per firm, total market quantity, and number of firms will all increase.
• B) the minimum average total cost, output per firm, total market quantity, and number of firms will increase, but equilibrium price will decrease.
• C) the minimum average total cost, equilibrium price, and output per firm will not change, but total market quantity and the number of firms will increase.
• D) the output per firm, total market quantity, and number of firms will increase, but equilibrium price and minimum average total cost will decrease.

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Definitions:

Partnership Law

The branch of law that governs the operations, rights, and obligations of parties in a partnership, including the formation, management, and dissolution of partnerships.

Written Contract

A legally binding agreement between two or more parties, explicitly detailed in a written document rather than agreed upon orally.

Sole Proprietorship

A type of business enterprise owned and managed by one person, where there is no legal distinction between the owner and the business.

Advantages

Benefits or positive aspects of a particular situation, strategy, or choice.