Suppose That Newspaper Companies Are Now Required to Use Recycled

question 116

Multiple Choice

Suppose that newspaper companies are now required to use recycled paper, which is more expensive than new paper. Which of the following is most likely to result if the newspaper industry is highly competitive?

• A) The firms' costs rise, resulting in positive economic profit in the short run and, hence, the industry supply curve shifts rightward in the long run.
• B) The firms' costs rise, resulting in economic losses in the short run and, hence, the industry supply curve shifts rightward in the long run.
• C) The firms' costs rise, resulting in economic losses in the short run and, hence, the industry supply curve shifts leftward in the long run.
• D) The industry supply curve shifts leftward in the short run, causing permanent long-run economic losses.

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Definitions:

Estradiol

A major form of estrogen, a hormone involved in the development and regulation of the female reproductive system and secondary sexual characteristics.

Endometrium

The inner lining of the uterus that thickens during the menstrual cycle in preparation for potential pregnancy.

Progesterone

A steroid hormone released by the corpus luteum and placenta, playing a key role in the menstrual cycle and maintaining the early stages of pregnancy.

Myometrium

Muscular wall of the uterus; composed of smooth muscle; also called muscular layer.