Holding All Else Constant, a Decrease in the Market Demand

question 131

Multiple Choice

Holding all else constant, a decrease in the market demand for a product in a competitive market would cause:

• A) the average total cost (ATC) curve of the firms to decrease.
• B) an increase in the price a firm could charge for the product.
• C) the marginal cost (MC) curve of the firms to decrease.
• D) the marginal revenue (MR) curve of the firms to shift downward.
• E) an increase in profits for the firm.

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Definitions:

Expected Return

The anticipated average return of an investment over a specific period, considering various probable outcomes.

Realized Return

The actual gain or loss experienced on an investment, calculated by taking the difference between the selling price and the purchase price.

Term Life

Term life is a type of life insurance policy that provides coverage at a fixed rate of payments for a limited period, known as the relevant term.

Death Benefit

The sum paid to a beneficiary upon the insured’s death, provided through a life insurance policy.