If Firms in a Price-Taker Industry Were Forced to Install

question 126

Multiple Choice

If firms in a price-taker industry were forced to install antipollution devices that increased their production costs, we should expect

• A) the cost curves for the firms in this industry to shift downward.
• B) the market price of the product to decrease.
• C) that the firms in the industry would suffer long-run economic losses.
• D) that the firms in the industry would earn normal economic profits in the long run, as the higher production costs were passed along to consumers in the form of higher prices.

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Definitions:

Physiological Processes

Biological functions and activities carried out by living organisms to maintain life, such as respiration, digestion, and regulation of body temperature.

Guilty-knowledge Test

A type of psychological test used to determine if a person has knowledge only someone involved in a crime would have, based on their physiological responses.

Polygraph Test

A method of lie detection that measures and records several physiological indices such as blood pressure, pulse, respiration, and skin conductivity while a person is asked a series of questions.

Aggressive Behavior

Acts that can result in harm or discomfort to others, often characterized by physical or verbal hostility.