The diagram concerns supply adjustments to an increase in demand (D 1 to D 2 ) in the immediate market period, the short run, and the long run. On the basis of this illustration, we can conclude that:
A. short-run adjustments are more economically efficient than are long-run adjustments.
B. the amount of time producers have to adjust to a change in demand is not a determinant of
supply elasticity.
C. supply is more elastic the greater the amount of time producers have to adjust to a change
in demand.
D. supply is less elastic the greater the amount of time producers have to adjust to a change
in demand.
C. supply is more elastic the greater the amount of time producers have to adjust to a change
in demand.
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Explain how an economy can experience long-run economic growth and deflation at the same time
What will be an ideal response?
A scatter diagram will be most useful
A) in discerning a possible relationship between height and weight for individuals. B) in resolving a dispute over two normative assertions. C) in predicting next year's rate of unemployment. D) All of the above are correct.
Economists agree that a monopolistically competitive market structure
A) can eliminate any excess capacity if all firms in the industry devote more funds to differentiating their products. B) lowers consumer utility because consumers pay a price higher than the marginal cost of production. C) is detrimental to society because it leads to a waste of scarce resources. D) benefits consumers because firms produce products that appeal to a wide range of consumer tastes.
All else equal, if the demand for capital decreases and the supply of capital does not change, the equilibrium real rental cost of capital will ________ and the equilibrium quantity of capital will ________
A) increase; increase B) decrease; not change C) decrease; decrease D) not change; decrease