In the short runQuestion 3Select one:a.existing firms may change the quantity they are supplying.b.new firms may enter an industry.c.quantity supplied is absolutely fixed.d.price and quantity supplied are absolutely fixed.Clear my choice
Question
In the short runQuestion 3Select one:a.existing firms may change the quantity they are supplying.b.new firms may enter an industry.c.quantity supplied is absolutely fixed.d.price and quantity supplied are absolutely fixed.Clear my choice
Solution
The correct answer is:
a. existing firms may change the quantity they are supplying.
Explanation:
In the short run, firms can adjust the quantity of output in response to changes in price. This is done by varying the amount of certain inputs like labor and raw materials. However, in the short run, firms cannot enter or exit the industry, and they cannot change their fixed inputs like capital or technology. Therefore, options b, c, and d are incorrect.
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