Suppose All Firms in an Industry in Long-Run Equilibrium Have

question 29

Multiple Choice

Suppose all firms in an industry in long-run equilibrium have U-shaped average cost curves.If the market demand increases,the resulting increase in price in the short run

• A) rations out the current production.
• B) rations out the current production and results in higher profits to producers.
• C) rations out the current production, results in higher profits to producers, and prompts existing firms to increase output by hiring more variable input.
• D) rations out the current production, results in higher profits to producers, prompts existing firms to increase output by hiring more variable input, and causes a short-run increase in industry capacity by drawing new producers into the market.
• E) rations out the current production, results in higher profits to producers, prompts existing firms to increase output by hiring more variable input, and causes a short-run increase in industry capacity by drawing new producers into the market, all while existing firms increase capacity by expanding plant size.

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Definitions:

Patient Self-Determination Act

A U.S. law enacted in 1990 that requires healthcare providers to inform patients of their rights to make advance directives about their medical care.

End of Life Care

Medical care and support provided to individuals in the final phase of a terminal illness, focused on comfort, quality of life, and easing the natural process of dying.

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Individuals legally recognized as being able to make decisions and bear responsibilities for their actions based on their age and mental capacity.

Mortality Rates

The measure of the frequency of occurrence of death in a defined population during a specified interval.