Consider a Competitive Market with a Large Number of Identical

question 242

Multiple Choice

Consider a competitive market with a large number of identical firms.What happens to the price if the demand increases in this market

• A)Price will increase in the short run then fall back to its original level in the long run.
• B)Price will decrease in the short run then rise to its original level in the long run.
• C)Price will increase in the short run then rise even more in the long run.
• D)Price will decrease in the short run then fall even more in the long run.

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Definitions:

Global Economy

refers to the interconnected worldwide economic activities and exchanges that transcend national borders.

China's Foreign Direct Investment

Investments made by China in business interests in other countries, in the form of ownership of firms or establishment of manufacturing or service facilities.

Insourcing

The practice of performing tasks or services within an organization, using its own employees and resources instead of outsourcing.

Global Sourcing

The practice of sourcing goods and services from the global market, across geopolitical boundaries.