When a Competitive Market That Comprises Firms That Face Identical

question 39

Multiple Choice

When a competitive market that comprises firms that face identical cost structures experiences an increase in demand, which of the following is most likely to occur?
(i) new firms will enter the market.(ii) in the long run, price will return to the level that existed before the change in demand
(iii) in the long run, all firms will be producing at their efficient scale

• A)(i) and (ii) only
• B)(i) and (iii) only
• C)(ii) and (iii) only
• D)(i), (ii) and (iii)

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Definitions:

Diffusion

The process by which an innovation is communicated through certain channels over time among the members of a social system.

Cultural Change

The modification of a society's cultural patterns, including norms, values, behaviors, and expressions.

Innovation

the introduction of new ideas, products, services, or processes that improve upon the existing state of art or knowledge.

Haptics

The study and use of touch communication, including how people perceive and convey messages through physical contact.