Which of the Following Is the Third Step in Deriving

question 26

Multiple Choice

Which of the following is the third step in deriving a flat long-run supply curve?

• A) market demand increases
• B) market supply increases until price returns to the original value
• C) firms earn extra-normal profits

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Definitions:

Regulation

A rule or directive made and maintained by an authority to control or manage activities, often used in the context of government policies.

Tradable Pollution Rights

An environmental policy approach allowing companies to buy or sell the right to emit a certain amount of pollutants, aiming to reduce overall emissions cost-effectively.

International Competition

Involves the rivalry between entities from different countries in various fields such as sports, business, technology, and education, aiming to establish supremacy or achieve a particular goal on a global scale.

Subsidies

Financial support provided by governments to organizations, businesses, or individuals, often to support economic activities deemed beneficial or necessary.