In the Long Run,what Adjustments Take Place When a Perfectly

question 17

Multiple Choice

In the long run,what adjustments take place when a perfectly competitive market in long-run equilibrium experiences an increase in demand?

• A) Price and profits fall, causing new firms to enter and existing firms to expand.
• B) Price and output remain fixed.
• C) Price rises but output remains unchanged.
• D) Price rises and firms expand output by using existing capacity more intensively.
• E) New firms enter and existing firms expand capacity, leading to an increase in supply and a decline in price.

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Definitions:

Risk-free Return

The theoretical return on an investment with zero risk of financial loss, often represented by the yield on government securities.

Defined Contribution Plan

A retirement plan where both the employee and employer contribute to an account, with the final benefit dependent on account performance.

Risk-free Return

The theoretical return on an investment with no risk of financial loss, typically less than the return on riskier investments.