Figure 14-1

question 49

Multiple Choice

Figure 14-1
-Refer to the Figure 14-1.If the economy starts at A and moves to D,what happens to the economy in the long run?

• A) It moves to C and then to A.
• B) It moves to B and then to A.
• C) It moves to C.
• D) It moves to A.

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and no barriers to entry or exit, leading to perfect information and the inability of any single entity to influence the market price.

Market Wage Rate

The prevailing rate of pay for a specific job or occupation in a labor market, influenced by supply and demand for labor.

Diminishing Returns

A principle stating that as investment in a single area of production increases, the rate of return from that investment, after a certain point, begins to decrease.