Assume There Is a Decrease in the Market Demand for a Good

question 5

Multiple Choice

Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output.How will the market adjust over time?

• A)Firms will enter the market, causing price to rise until losses are eliminated.
• B)Firms will enter the market, causing price to fall until positive profits are eliminated.
• C)Firms will exit the market, causing price to rise until losses are eliminated.
• D)Firms will exit the market, causing price to fall until positive profits are eliminated.

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Definitions:

Mercury

A naturally occurring heavy metal and chemical element known as Hg on the periodic table, which is liquid at room temperature and can be toxic to humans and the environment.

Material Safety Data Sheet

A document that provides information on the properties of hazardous chemicals, and instructions for safe handling and emergency measures in case of exposure.

Hazard Evaluation

The process of identifying and assessing potential hazards that could cause injury, illness, or adverse health effects in a particular environment or product.

Chemicals

Substances used in or produced by chemical processes, which are essential to modern life but can also be hazardous if not managed properly.