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:

Governmental Taking

In law, the act of a government seizing private property for public use, often with compensation to the owner.

Unconstitutional Conditions

The principle that the government cannot condition the receipt of a government benefit or the ability to participate in a government program upon the waiver of a constitutionally protected right.

Just Compensation

Refers to the compensation or remuneration required by law to be paid to an individual whose property has been taken for public use, ensuring the payment is fair and adequate.

Takings Clause

A provision in the Fifth Amendment of the U.S. Constitution that prohibits the government from taking private property for public use without "just compensation."