In a Constant Cost Industry, the Market Price and Average

question 11

Multiple Choice

In a constant cost industry, the market price and average costare equal to $23. Therefore, which of the following is correct?

• A)An increase in demand will cause the short-run price to rise above $23 but, in the long run, the price will return to
• $23)
• B)An increase in demand will cause profits to rise and firms to enter the industry until profits return to normal.
• C)A decrease in demand will cause market price to fall below average cost and thus firms will earn negative
• Profits.
• D)All of the answers are correct.

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Definitions:

Rectal Temperature

The measurement of body temperature taken from inside the rectum, which is considered more accurate than some other methods of temperature measurement.

Thermometer

An instrument, either electronic or disposable, that is used to measure body temperature.

Oral Temperature

Body temperature measured by a thermometer placed in the mouth, reflecting the core body temperature.

Pulse Points

Specific locations on the body where arterial pulsations can be felt, such as the wrists, neck, and ankles, useful for assessing heart rate and circulation.