In a Perfectly Competitive Market That Is in Long-Run Equilibrium

question 29

Multiple Choice

In a perfectly competitive market that is in long-run equilibrium, a rightward shift in the market demand curve results in

• A) the price falling in the short run.
• B) the firms' economic profits falling in the short run.
• C) firms leaving the industry in the long run.
• D) none of the events listed above.

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Definitions:

Experts Solving

The process by which individuals with specialized knowledge and skills apply their expertise to solve problems in their specific domain more effectively and efficiently than novices.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making.

Systematic Test

An organized and structured examination or evaluation designed to assess a particular function, hypothesis, or attribute.

Intuitive Principles

Refers to the underlying, often unspoken rules that guide our gut reactions and instant judgments.