Which One of the Following Factors Is Not an Explanation

question 229

Multiple Choice

Which one of the following factors is not an explanation of the positive relationship between market price and quantity supplied?

• A) The law of diminishing returns makes it more costly for firms to expand output quickly.
• B) As price increases, some less efficient firms will enter the market.
• C) For most firms, unit costs decrease as output increases in the long run.
• D) As all firms in an industry hire more factors of production, the prices paid for them often increase.

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