Refer to the Information Provided in Figure 12 $$D ^ { \prime }$$

question 99

Multiple Choice

Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3. The DVD industry is a constant-cost industry. As the demand for DVD players shifts from D to $$D ^ { \prime }$$ , which of the following is LEAST likely to result?

• A) More resources will be allocated to produce DVD players.
• B) The demand for DVDs will increase.
• C) If the market for DVD players is competitive, the price will increase to $5.00 in the short and long run.
• D) If the market for DVD players is perfectly competitive, economic profits in this industry will increase in the short run, but will fall back to zero in the long run.

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Definitions:

Aggregate Demand

The sum of all demands for products and services in an economy, set at a particular price level and time period.

Aggregate Demand

Unified demand for all forms of goods and services in an economic landscape at a determined general price level throughout a certain time period.

Stabilize Output

An economic strategy aiming to maintain consistent levels of production and minimize fluctuations in an economy.

Unemployment Insurance

Unemployment insurance is a government program that provides temporary financial assistance to individuals who have lost their job through no fault of their own, aiming to mitigate economic hardship.