Figure 6.5 -Figure 6.5 Shows the Short-Run and Long-Run Effects of an of an Increase

question 8

Multiple Choice

Figure 6.5
-Figure 6.5 shows the short-run and long-run effects of an increase in demand of an industry. The market is in equilibrium at point A, where 100 identical firms produce 6 units of a product per hour. If the market demand curve shifts to the right, what will happen to the number of firms in the industry as the industry moves from point A to point B?

• A) It increases.
• B) It decreases.
• C) It remains the same.
• D) either A or B or C

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Definitions:

Geographic-Based Pay

A compensation strategy that adjusts an employee's pay based on the cost of living and market wage rates in the geographic location where they work.

Market Pricing

The process of determining the external value of jobs within an organization by comparing the organization's jobs to similar jobs in the external labor market.

Small Firms

Businesses or enterprises with a small number of employees, potentially offering more personalized services and having less market influence than larger companies.

Performance Pay

A compensation strategy that ties employee payment directly to their performance outcomes or achievements.