When the price of a product rises, the increase in quantity supplied will generally be greater in the long run than the short run because
A) producers maximize short-run, not long-run, profits.
B) over time, new firms will enter the industry and old firms will expand their operations in response to the price increase.
C) consumers are less resistant to higher prices in the long run than in the short run because they have fewer options in the long run.
D) consumer income will expand in the long run, causing resource prices to rise, which will induce producers to increase output.

Question

Quizplus · Accepted Answer

In the long run, firms have more time to adjust to price changes, allowing new firms to enter the market and existing firms to expand, increasing the quantity supplied.

When the Price of a Product Rises, the Increase in Quantity