-Refer to the Above Figure

question 98

Multiple Choice

-Refer to the above figure. Suppose that the supply curve shifts from SA to SB while the demand curve remains at DA. Which of the following is TRUE?

• A) Only quantity supplied has increased.
• B) Only quantity demanded has decreased.
• C) Supply has increased.
• D) Supply has decreased.

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Definitions:

Marginal Revenue

The additional income that a firm receives from selling one more unit of a good or service.

Average Total Cost

The sum of all production costs (fixed and variable) divided by the quantity of output, indicating the per-unit cost of production.

Market Entry

The method or approach used by a business to penetrate a new industry or market.

Contestable Market

A market structure where there is freedom of entry and exit, making it possible for new competitors to enter the market easily.