If the Demand Increases for the Product of a Constant-Cost

question 2

Multiple Choice

If the demand increases for the product of a constant-cost industry:

• A) long-run output goes up, but long-run price may go up or down.
• B) short-run output goes up, but long-run output may go up or down.
• C) short-run price goes up, but long-run price remains constant.
• D) long-run output goes up, but short-run price remains constant.
• E) long-run price goes up, but short-run price may go up or down.

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Definitions:

Company Performance

An assessment of a firm's operational efficiency, profitability, and financial health.

Wages

The fixed regular payment, typically calculated on an hourly or daily basis, paid by an employer to an employee for their labor.

Type II Error

The statistical mistake of failing to reject a false null hypothesis, also known as a "false negative".

Type I Error

The incorrect rejection of a true null hypothesis, also known as a "false positive" finding.