Refer to the Above Graph

question 113

Multiple Choice

Refer to the above graph.What will shift D₁ to D₂?

• A) An increase in productivity
• B) A decrease in product demand
• C) An increase in the price of complementary input
• D) A decrease in the price of a substitute input (if the substitution effect is greater than the output effect)

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Definitions:

Short-run

A time frame in which at least one factor of production is fixed, limiting adjustments to production levels.

Economic Profits

The difference between a firm's total revenues and its total economic costs, where economic costs include both explicit and implicit costs.

Perfectly Competitive

In a perfectly competitive market, there are many buyers and sellers, the products are homogenous, and no single entity can influence the market price.

Demand Rises

Occurs when there is an increase in the quantity of a good or service that consumers are willing and able to purchase at a given price.