If the demand increases in a perfectly competitive market, what will likely occur?
A. The short-run supply curve will shift to the right, causing price to eventually fall.
B. Firms will temporarily make a profit due to a higher price.
C. Firms will enter the market in hopes of capturing some profits.
D. All of these are true.
Answer: D
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The function of money as a store of value diminishes if
A) money is no longer backed by gold. B) prices of goods and services increase. C) people begin to barter. D) interest rates increase.
With a human capital investment (such as the investment in going to college), the most important cost tends to be
A. the opportunity cost of not working. B. taxes. C. books and equipment. D. foregone leisure.
Refer to the table representing Kara's bank account. Assuming that $2,000 was deposited into her account at the beginning of year 1, and no further deposits or withdrawals were made, the value for cell E:
A. cannot be determined.
B. is $2,662.
C. is $2,600.
D. is $2,200.
In the figure, AD 1 and AS 1 represent the original aggregate supply and demand curves and AD 2 and AS 2 show the new aggregate demand and supply curves. The change in aggregate supply from AS 1 to AS 2 could be caused by:
A. a reduction in the price level.
B. the increase in productivity.
C. an increase in business taxes.
D. the real-balances, interest-rate, and foreign purchases effects.