Assume That Goods X and Y Are Substitutes and Are

question 15

Multiple Choice

Assume that goods X and Y are substitutes and are produced in perfectly competitive markets.If there is a decrease in the supply of good X,which of the following will happen in the market for good Y in the long run?

• A)Firms will exit, causing market price to rise.
• B)Firms will enter, causing market price to fall.
• C)Price will be higher at the new long-run equilibrium as a result of entry into the market.
• D)The firms that were already in the industry will continue to earn positive economic profit.

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Definitions:

Parallelism

Parallelism refers to the practice of ensuring elements in sentences are grammatically similar or identical in structure, sound, meaning, or meter to enhance coherence and balance.

Bank Debits

Transactions that reduce the account balance of a bank account, representing money that has been withdrawn or payments made.

Freight Loadings

The process or act of loading cargo for transport by various modes of transportation like trains, ships, or airplanes.

Parallelism

The use of components in sentences that are grammatically the same, or similar in their construction, sound, meaning, or meter.