A Perfectly Competitive Industry with Constant Costs Initially Operates in Long-Run

question 192

Multiple Choice

A perfectly competitive industry with constant costs initially operates in long-run equilibrium.When demand increases,in the long run and the short run:

• A)positive economic profits will result for all firms.
• B)higher prices will result.
• C)output will increase.
• D)negative economic profits will result for some firms.

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Definitions:

Social Facilitation

When the mere presence of others improves performance.

Group Polarization

The phenomenon by which a group's prevailing attitudes or beliefs become more extreme following group discussions, as members tend to support more extreme positions.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Door-In-The-Face

A persuasion technique involving making a large, unreasonable request that is likely to be refused in order to increase the likelihood of agreement to a smaller request later.