-Suppose the Cost Curves in the Above Figure Apply to All

question 445

Multiple Choice

-Suppose the cost curves in the above figure apply to all firms in the market. Then, if the initial price is P₁, in the long run the market

• A) demand will increase.
• B) demand will decrease.
• C) supply will increase.
• D) supply will decrease.

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Definitions:

Operating Lease

A leasing agreement allowing a lessee to use an asset, but the lease does not transfer ownership of the asset to the lessee.

Risk Of Obsolescence

The risk that a product or service will become outdated or no longer useful due to advancements in technology or changes in market preferences.

Income Tax

A tax imposed by the government on the income generated by individuals or entities, which varies according to the amount of income.

Land Improvements

Enhancements made to a plot of land, such as landscaping, fencing, or sidewalk construction, which increase the land's value and usefulness but may depreciate over time.