Assume a Purely Competitive Constant-Cost Industry Is Initially in Long-Run

question 246

Multiple Choice

Assume a purely competitive constant-cost industry is initially in long-run equilibrium, producing 9 million units at a market price of $18.00. Suppose that an increase in consumer demand occurs. After all economic adjustments have been completed, which output and price combination is most likely to occur?

• A)9.5 units at a price of $19.25.
• B)10 units at a price of $18.00.
• C)9 units at a price of $20.00.
• D)8 units at a price of $18.00.

---

Definitions:

Toll-free Telephone Numbers

Special phone numbers that do not charge the caller, often used by businesses to encourage customer contact.

Purchases

The action of buying goods or services, often considered in terms of frequency, volume, and the decision-making process involved.

Missionary Salesperson

A salesperson who promotes a product indirectly, often focusing on educating potential customers rather than directly closing sales.

Tyco Healthcare

A former name for Covidien, a healthcare company that provides medical devices and supplies, now part of Medtronic.