If Consumers Suddenly Began Desiring More Apples and Fewer Oranges

question 418

Multiple Choice

If consumers suddenly began desiring more apples and fewer oranges,

• A) the market price of apples would rise, creating short-run economic profits in the apple industry. Current firms will expand output and new firms will enter the industry.
• B) the market price of oranges would fall, creating short-run economic losses in the orange industry. Current firms will reduce output and some will go out of business in the long run.
• C) neither a nor b are correct.
• D) both a and b are correct.

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Definitions:

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The average income earned per person in a specific area or country in a specified year.

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A tool for strategic planning that helps identify the Strengths, Weaknesses, Opportunities, and Threats associated with competitive business environments or project planning scenarios.

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Strategic Planning Analysis

The process of conducting research and analysis of an organization's strategic goals to develop plans for future growth and performance improvements.