Short-Run Economic Profits in a Perfectly Competitive Industry Encourage Firms

question 201

Multiple Choice

Short-run economic profits in a perfectly competitive industry encourage firms to _____ the industry,and short-run losses encourage firms to _____ the industry.

• A)exit;enter
• B)enter;enter
• C)enter;exit
• D)exit;exit

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Definitions:

Liquidated Damages

refers to a predetermined sum agreed upon by the parties to a contract, to be paid as compensation in case of breach of contract.

Exemption Clause

A contract term that attempts to limit or exclude liability for certain events or damages.

Deposit Forfeiture

A legal or contractual process wherein a deposit made as part of a transaction is lost due to non-compliance with the terms of the agreement.

Exemption Clause

A contractual term that limits or excludes one party's liability for certain breaches, circumstances, or events.