If a Product Is Manufactured Under Conditions of Constant Cost

question 176

Multiple Choice

If a product is manufactured under conditions of constant cost, an increase in the demand for the product will increase

• A) both equilibrium quantity and equilibrium price in the long run.
• B) equilibrium price, but equilibrium quantity will be unchanged in the long run.
• C) equilibrium quantity, but equilibrium price will be unchanged in the long run.
• D) equilibrium quantity but reduce equilibrium price in the long run.

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Definitions:

Sweat Equity

A non-monetary investment that increases the value or ownership interest created by the investment of hard work for no compensation.

Entrepreneur

An individual who creates, organizes, and operates a business venture, taking on greater than normal financial risks in order to do so.

Business

An organization or entrepreneurial entity engaged in commercial, industrial, or professional activities with the aim of generating profits by providing goods or services.

Sweat Equity

The non-monetary investment, typically in the form of labor or services, that a person contributes to a project or business.