If You Were to Put the Following Effects of a Decrease

question 5

Multiple Choice

If you were to put the following effects of a decrease in demand into the sequence in which they occur,which would be the last one?

• A)The demand curve facing each individual firm shifts downward.
• B)Each firm reduces quantity supplied to the point where marginal cost equals its decreased marginal revenue.
• C)In the short run, the market price drops.
• D)Market output falls.
• E)A short-run loss forces some firms out of business in the long run.

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Definitions:

Marginal

Pertaining to small changes or differences in a firm's output or in the amount of a product consumed, often related to decisions about whether to increase or reduce production or consumption.

Trade-off

A trade-off involves a sacrifice that must be made to obtain a certain product, service, or experience, understanding that choosing one option usually means forgoing another.

Society

A community of people living together in an organized way, making decisions about how to do things and sharing the work that needs to be done.

Rational People

People who systematically and purposefully do the best they can to achieve their objectives.