A Sudden Increase in the Market Demand in a Competitive

question 4

Multiple Choice

A sudden increase in the market demand in a competitive industry leads to

• A)Losses in the short-run and average profits in the long-run
• B)Above average profits in the short-run and average profits in the long-run
• C)New firms being attracted to the industry
• D)Demand creating supply

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Definitions:

Transduction

Conversion of one form of energy into another. In sensation, the transforming of stimulus energies, such as sights, sounds, and smells, into neural impulses our brain can interpret.

Perceptual Sets

A psychological mechanism that influences how we perceive the world based on expectations, previous experiences, and context.

Sensory Stimulation

Input to the senses (sight, sound, touch, taste, and smell) that can influence a person's physical, emotional, and cognitive states.

Higher-level Mental Processes

Complex cognitive functions such as problem-solving, reasoning, decision-making, and critical thinking that involve advanced brain operations.