In a Constant Cost Industry, P = AC = $20

question 1

Multiple Choice

In a constant cost industry, P = AC = $20. Which sequence of events follows an increase in demand?

• A) P > AC, firms make an economic profit, existing firms expand output, new firms enter the industry, the short-run supply curve shifts right, price falls until profits return to $0
• B) P > AC, firms make an economic profit, existing firms expand output, new firms enter the industry, the short-run supply curve shifts left, price falls until profits return to $0
• C) P < AC, firms suffer an economic loss, existing firms reduce output, new firms enter the industry, the short-run supply curve shifts right, price falls until profits exceed $0
• D) P = AC, firms make no economic profit, existing firms leave output unchanged, new firms enter the industry, profits remain normal, P = AC = $20

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Definitions:

Sexual Response Cycle

A model that describes the sequence of physical and emotional changes that occur as a person becomes sexually aroused and participates in sexually stimulating activities.

Paraphilia

Unusual or atypical sexual interests, where sexual arousal is obtained from objects, situations, or individuals that are not part of normative stimulation.

Sexually Arousing Fantasies

Imaginative thoughts or scenarios that elicit sexual desire and arousal.

Female Orgasmic Disorder

A sexual disorder characterized by a persistent or recurrent difficulty in achieving orgasm after ample sexual arousal and stimulation.