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.