The Long-Run Supply Curve for a Product Is Horizontal with ATC

question 19

Multiple Choice

The long-run supply curve for a product is horizontal with ATC = 400.Market demand is defined as P = 1,000 - 4Q.The market is competitive and is in long-run equilibrium with 50 firms in the industry.If demand increases to P = 1,240 - 4Q,how many firms will be in the industry at the new long-run equilibrium?

• A) 30.
• B) 40.
• C) 50.
• D) 60.
• E) 70.

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Definitions:

Role-Playing

A method or scenario in which individuals assume roles and act them out in a simulated context, often used in training, therapy, or educational settings.

Cognitive Dissonance Theory

A psychological theory proposing that we experience discomfort or dissonance when our beliefs, attitudes, or behaviors are inconsistent, leading us to change one to reduce the dissonance.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing the role of situational factors.

Role-Playing

The act of imitating the character and behaviors of someone else, often as a learning tool or form of entertainment.