Suppose the Equilibrium Price in a Perfectly Competitive Industry Is

question 119

Multiple Choice

Suppose the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112.Which of the following will happen?

• A)The firm will not sell any of its output.
• B)The firm will sell more output than its competitors.
• C)The firm's profits will increase.
• D)The firm's revenue will increase.
• E)The firm will gradually take over the entire industry.

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Definitions:

TR

Total Revenue; the total receipts from sales of goods or services provided by a company before any deductions are made.

TVC

Total Variable Cost; the total of all costs that vary with the level of output produced by a company.

Economic Loss

A monetary reduction in income, net worth, or value of assets beyond normal expectations, often as a result of business activities or economic policies.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand.