1. In a perfectly competitive decreasing-cost industry, a decrease in market dem
ID: 1099794 • Letter: 1
Question
1. In a perfectly competitive decreasing-cost industry, a decrease in market demand in the long run causes:
A. a decrease in quantity, an increase in price, and no change in profit.
B. a decrease in quantity, price, and profit.
C. a decrease in quantity, no change in price, and no change in profit.
D. a decrease in quantity, an increase in price, and an increase in profit.
2. When Circuit City closed its stores, the market supply of electronic goods:
A. decreased, causing the market price to fall.
B. decreased, causing the market price to rise.
C. increased, causing the market price to fall.
D. increased, causing the market price to rise.
Explanation / Answer
1. In a perfectly competitive decreasing-cost industry, a decrease in market demand in the long run causes a decrease in quantity, an increase in price, and an increase in profit.
2. When Circuit City closed its stores, the market supply of electronic goods decreased, causing the market price to fall.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.