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

question 164

Multiple Choice

Assume that a perfectly competitive market is in long-run equilibrium.Suppose as a result of a health hazard associated with the industry's product, demand decreases drastically.What is the immediate result of this event?

• A)The market price falls and the typical firm suffers an economic loss.
• B)The market supply increases to offset the fall in demand.
• C)The typical firm's average total cost curve shifts downward.
• D)The typical firm's marginal cost curve shifts to the left.

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Definitions:

Resistor Voltage

The voltage drop across a resistor, determined by the current flowing through it and its resistance, according to Ohm's Law.

Power Factor

A measure of how effectively electrical power is converted into useful work output, with a value ranging from 0 to 1, where 1 indicates maximum efficiency.

Parallel Circuit

An electrical circuit in which components are connected in parallel, resulting in the same voltage across each component but possibly different currents through each.

Inductive Reactance

The resistance offered by an inductor to the flow of alternating current, measured in ohms.