The Motivating Force Behind an Increase in Supply in a Long-Run

question 25

Multiple Choice

The motivating force behind an increase in supply in a long-run adjustment to equilibrium is

• A) lower prices.
• B) economic profits that are present in the short run.
• C) higher profit expectations among owners of firms in the industry, triggered by increased prices.
• D) normal profits witnessed by individuals outside the industry that trigger entry.
• E) the decreases in average cost that can be obtained through economies of scale.

---

Definitions:

Selective Retention

The process by which individuals remember only that information which aligns with their beliefs or knowledge, often leading to biased decision-making.

Consumer Purchase Decision Process

The stages a buyer goes through in making choices about which products or services to buy, including problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.

Alternative Evaluation

The stage in the consumer decision-making process where individuals compare different products or brands they have identified as being capable of satisfying their need.

Postpurchase Behavior

The actions and reactions of consumers after purchasing a product or service, including satisfaction, regret, or loyalty.