In Long-Run Equilibrium with Trade, Losses from Import Competition Will

question 43

Multiple Choice

In long-run equilibrium with trade, losses from import competition will force some firms to ______________, increasing demand for the remaining firms' output, which will then cause their demand curves to become ______________, due to the increased variety of products from _______________.

• A) raise prices; steeper; new firms entering the industry
• B) leave the industry; flatter; foreign firms
• C) lower prices; more inelastic; new firms entering the industry
• D) lay off workers; more elastic; the research and development departments in firms

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Definitions:

Status Quo

The current state or condition of affairs, often used in the context of maintaining existing circumstances or resisting change.

Driving Forces

Describes elements or factors that contribute significantly to the pushing or motivation toward the achievement of a certain goal or change within an individual or organization.

Restraining Forces

Factors that resist or oppose the direction of change, making it difficult to move from the current state to a desired future state in organizational and personal development.

Force Field Analysis

A technique used to identify and analyze the forces that either aid or hinder the achievement of a certain goal or change.