If Price Exceeds Average Costs Under Pure Competition,____ Firms Will

question 16

Multiple Choice

If price exceeds average costs under pure competition,____ firms will enter the industry,supply will ____,and price will be driven ____.

• A) more; decrease; down
• B) more; decrease; up
• C) more; increase; down
• D) more; increase; up
• E) none of the above

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Definitions:

Ordinary Annuity

A series of equal payments made at regular intervals, such as monthly or annually, with the payments occurring at the end of each period.

Investment Account

A financial account held by an investment dealer that enables individuals to purchase securities such as stocks, bonds, and mutual funds.

Annually

Happening annually.

EAR

The Effective Annual Rate, a measurement of interest that takes into account the effect of compounding over the period of time it is applied.