When a Competitive Market Experiences an Increase in Demand That

question 44

Multiple Choice

When a competitive market experiences an increase in demand that increases production costs for existing firms and potential new entrants, which of the following is most likely to arise?

• A)The long-run market supply curve will be upward sloping.
• B)The condition of free entry into the market will be violated.
• C)Producer profits will fall in the long run.
• D)The long-run market supply curve will be horizontal as new firms enter and drive the price downward.

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Definitions:

Pronation

The rotation of the forearm or foot so that the palm or sole is facing downwards or backwards.

Cubital Joint

Also referred to as the elbow joint, it is a complex hinge joint involving the humerus, radius, and ulna bones of the arm.

Hinge Joint

A type of joint that allows motion in one plane, similar to the movement of a door hinge, such as the elbow or knee.

Saddle

A supportive structure placed on the back of an animal for riding or an engineering component designed to spread load.