The Long-Run Supply Curve for a Purely Competitive Industry Would

question 9

Multiple Choice

The long-run supply curve for a purely competitive industry would be horizontal when

• A) an increase in product demand causes an increase in resource prices.
• B) an increase in product demand causes a decrease in resource prices.
• C) a decrease in product demand causes a decrease in the number of firms.
• D) a decrease in product demand causes no effect in resource prices.

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Definitions:

Egocentrism

A cognitive bias where an individual is unable to understand or assume any perspective other than their own.

Peer Group

A social group whose members have interests, social position, and age in common.

Generation

A group of individuals, most often classified by their birth years, who experience similar cultural, social, and economic conditions at roughly the same stage in life.

Socialized

Refers to the process through which individuals learn the values, norms, and required behaviors of their society or group.