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.

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Definitions:

Inductive Reactance

The opposition that inductance presents to alternating current, depending on the frequency of the current and the inductance value, measured in ohms.

Total Current

The complete or aggregate current flowing through a circuit, taking into account all phases and pathways.

Parallel Circuit

An electrical circuit where components are connected across common points or junctions, providing multiple paths for current.

Inductive Reactance

The resistance to the change in current flow by an inductor in an AC circuit, measured in ohms and dependent on frequency.