Consider a Competitive Market with a Large Number of Identical

question 138

Multiple Choice

Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In this market, an increase in demand will

• A)increase price in the short run but not in the long run.
• B)increase price in the long run but not in the short run.
• C)increase price both in the short and the long run.
• D)not affect price in either the short or the long run.

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Definitions:

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The mechanical component used to transmit power from an engine or motor to the propeller in a boat or aircraft.