Suppose that a long-run adjustment in a perfectly competitive industry results in decreased industry output but leaves price unchanged. Which of the following must be true?
a. The market demand curve did not shift
b. The market demand curve shifted left; the market supply curve shifted right
c. The market supply curve shifted left; the market demand curve shifted right
d. Both market supply and demand increased, but supply increased more than demand
e. The industry is a constant-cost industry
E
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Define and explain how we calculate the marginal propensity to consume and the marginal propensity to save
What will be an ideal response?
Goods and services are scarce because
a. people are greedy b. they are produced using scarce resources c. firms keep production low in order to earn higher profits d. they are produced by firms that seeks profits e. government wants to maintain its power over the economy
A budget surplus means that
A. government expenditures are greater than revenues in a given year. B. government revenues are greater than expenditures in a given year. C. a nation's imports are greater than its exports. D. a nation's exports are greater than its imports.
Which of the following is most closely related to the "fair results" approach to fairness?
A) efficient resource use B) having an equal income distribution C) voluntary exchange D) the command system of allocating resources E) price hikes in a natural disaster