Suppose That a Competitive Market Is Initially in Equilibrium

question 510

Multiple Choice

Suppose that a competitive market is initially in equilibrium. Then demand increases. If entering firms face the same costs as existing firms and sufficient resources are available for entering firms,

• A)the long-run market supply curve will be upward sloping.
• B)the long-run market supply curve will be perfectly elastic.
• C)in the long run firms will suffer economic losses, leading them to exit the industry.
• D)the number of firms will decrease, and the market will become a monopoly.

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Definitions:

Correlate

To have a mutual relationship or connection between two or more things, where one can be related to or affect the other.

Trait Approach

A perspective in psychology focused on identifying, describing, and measuring individual characteristics and differences in personality.

Personality

A unique set of emotional, thoughts, and behavioral patterns that define an individual.

Collective Unconscious

A concept in Jungian psychology referring to the part of the unconscious mind that is derived from ancestral memory and experience, shared among beings of the same species.