When the Price of a Product Rises, the Increase in Quantity

question 233

Multiple Choice

When the price of a product rises, the increase in quantity supplied will generally be greater in the long run than the short run because

• A) producers maximize short-run, not long-run, profits.
• B) over time, new firms will enter the industry and old firms will expand their operations in response to the price increase.
• C) consumers are less resistant to higher prices in the long run than in the short run because they have fewer options in the long run.
• D) consumer income will expand in the long run, causing resource prices to rise, which will induce producers to increase output.

Understand the role and requirements of the Securities and Exchange Commission concerning corporate financial statements.

Understand the accounting treatment for the issuance of common stock above par value.

Comprehend the concept of legal capital and its significance for corporations.

Identify and record the initial issuance of stock and related expenses.

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