The Resource Cost Falls in a Purely Competitive Industry

question 217

Multiple Choice

The resource cost falls in a purely competitive industry. This change will result in a(n)

• A)increase in marginal cost for firms in the industry and an increase in the industry supply curve.
• B)decrease in marginal cost for firms in the industry and a decrease in the industry supply curve.
• C)decrease in marginal cost for firms in the industry and an increase in the industry supply curve.
• D)increase in marginal cost at each output level for firms in the industry and an increase in the industry supply curve.

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Definitions:

Coordination Gains

Benefits that arise from individuals or groups working together effectively, particularly in the allocation of resources or in achieving common objectives.

Product Variety

The assortment of different products or services offered by a firm or present in a market.

Product Differentiation

The strategy of highlighting what makes a product or service unique in the market to boost its appeal to a particular target group.

Innovation

The process of transforming ideas into new or improved products, services, or processes, driving economic growth and solving problems.