When Consumer Demand for a Good Produced in a Price-Taker

question 133

Multiple Choice

When consumer demand for a good produced in a price-taker market decreases,

• A) firms in the industry will continue to produce at the same output levels as before.
• B) total market output will generally rise, but each individual firm will reduce its output.
• C) the market price of the good will rise, causing additional resources to flow into the industry in the long run.
• D) some firms will shut down in the long run, making their resources available for the production of other goods.

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Definitions:

Early Retirement

A process where employees opt to retire before the traditional retirement age, often with specific incentives offered by employers.

Available-For-Sale Investment

A classification for investments in securities that are not classified as held-to-maturity or trading securities, with changes in their value recorded in other comprehensive income.

Equity-Method Income

Income recognized by an investor from its investment in another entity, equivalent to the investor's share of the investee's net income.

Net Income

The total profits of a company after all expenses and taxes have been deducted from revenue.