Graph 14-9 -Refer to Graph 14-9.If the Market Starts in Equilibrium at in Equilibrium

question 180

Multiple Choice

Graph 14-9
-Refer to Graph 14-9.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:

Existing Market

A market where products or services are already available and where a business may face competition upon entry.

Product Line

A group of closely related products that are treated as a unit because of similar marketing strategy, production, or end-use considerations.