When the Price of a Product Rises, the Increase in Quantity

question 233

Multiple Choice

When the price of a product rises, the increase in quantity supplied will generally be greater in the long run than the short run because

• A) producers maximize short-run, not long-run, profits.
• B) over time, new firms will enter the industry and old firms will expand their operations in response to the price increase.
• C) consumers are less resistant to higher prices in the long run than in the short run because they have fewer options in the long run.
• D) consumer income will expand in the long run, causing resource prices to rise, which will induce producers to increase output.

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