An Increase in Market Demand Will Cause an Increase in Industry

question 78

Multiple Choice

An increase in market demand will cause an increase in industry output in the long run because

• A)new firms enter the industry.
• B)new firms enter the industry and all firms increase their output.
• C)all firms decrease their output but more new firms enter.
• D)no firms enter but the existing firms increase their output.

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Definitions:

Vertical Axis

The y-axis in a chart or graph, which often represents the range of the dependent variable.

Slope

The rate at which a line inclines or declines, showing the relationship between two variables in a graph, calculated as the rise over the run.

Graph

A graph is a visual representation of data, showing relationships between variables typically through lines, bars, or points.

Relationship

How two or more thoughts, entities, or persons are associated, or the status of being associated.