A Perfectly Competitive Market Is Initially in Long-Run Competitive Equilibrium

question 31

Multiple Choice

A perfectly competitive market is initially in long-run competitive equilibrium. Then, market demand increases. This causes existing firms in the market to __________ and __________. As a result of the latter, the market supply curve shifts __________.

• A)produce more output; some existing firms to exit the market; leftward
• B)produce less output; new firms to enter the market; rightward
• C)produce more output; new firms to enter the market; rightward
• D)expand their plant size; some existing firms to exit the market; leftward

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Definitions:

Economic Harm

Damage or detriment to one's financial condition or prospects.

Physical Injury

Bodily harm or damage that a person suffers due to an accident, violence, or other incident.

Proximate Cause

The primary reason or event that directly leads to an injury or damage, and without which the injury or damage would not have occurred.

Zone Of Danger

A legal doctrine that outlines the area within which a person can recover damages if they were put at risk of physical harm by someone else's negligence.