Which Scenario Is MOST Likely to Cause Firms to Exit

question 301

Multiple Choice

Which scenario is MOST likely to cause firms to exit a perfectly competitive industry?

• A)Consumer tastes and preferences for this product get stronger,making them more interested in the good.
• B)A technological advance allows all firms to produce more efficiently.
• C)The price of a key variable input falls.
• D)Consumer income falls.

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Definitions:

Holder in Due Course

A party who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be raised against the prior holder.

Indorsement

The act of signing one's name on a financial document, such as a check, thereby transferring rights or title to another party.

Collection Indorsement

An endorsement on a negotiable instrument, such as a check or promissory note, that specifies the particular person to whom the payment is to be made.

Fictitious Payee Rule

A principle in commercial law that protects the drawer of a check if the check is made payable to a non-existent or not intended recipient, under certain conditions.