If There Is an Increase in Market Demand in a Competitive

question 204

Multiple Choice

If there is an increase in market demand in a competitive price-taker market, then in the short run

• A) there will be no change in the demand curves faced by individual firms in the market.
• B) the demand curves for firms will shift downward.
• C) the demand curves for firms will become more elastic.
• D) profits will rise.

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Definitions:

Parol Evidence Rule

A common law rule that states that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend the written agreement to be the complete and final version of their agreement.

Parol

Relating to or given by word of mouth; not in writing or formalized in documents.

Parol Evidence Rule

A rule in contract law that prevents parties from presenting evidence of prior or contemporaneous agreements that would contradict the written terms of the contract.

Oral Contracts

Agreements made through spoken communication that are binding, albeit harder to prove than written contracts.