Assume That an Inferior Good Is Produced in a Perfectly

question 18

Multiple Choice

Assume that an inferior good is produced in a perfectly competitive,increasing-cost industry with external diseconomies.The market is initially in long-run equilibrium.After all long-run adjustments are made,which of the following would occur in this market as a result of an increase in consumers' incomes?

• A)The market price would remain unchanged;the market quantity would rise.
• B)The market price would rise;the market quantity would fall.
• C)The market price would remain unchanged;the market quantity would fall.
• D)Both the market price and the market quantity would fall.
• E)Both the market price and the market quantity would rise.

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Definitions:

Psychoanalysis

A therapeutic approach founded by Sigmund Freud that explores unconscious motives and conflicts as they influence personality and behavior.

Systematic Fashion

Refers to doing things in a methodical, organized way, typically to achieve efficiency and to ensure that no steps are missed.

Sample Size

The number of individuals or observations included in a study, which can affect the reliability and validity of the research findings.

Temper Tantrums

Emotional outbursts, often observed in children, that are characterized by yelling, crying, and aggressive or defiant behavior.