When Economic Profit Exists in a Perfectly Competitive Market,we Expect

question 98

Multiple Choice

When economic profit exists in a perfectly competitive market,we expect

• A) existing firms to join forces and increase their prices so as to earn an even larger profit.
• B) existing firms to compete and lower their prices in order to gain market share.
• C) existing firms to join forces to prevent other firms from entering the industry.
• D) new firms to enter the industry,causing the market price to eventually fall.
• E) new firms to enter the industry,causing the market price to rise even higher.

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Definitions:

Matrix Differentiation

A network-like organizational structure that allows for multiple reporting lines and integrates functional and project-based responsibilities.

Spatial Differentiation

The degree to which locations of an organization's units are physically separated, impacting coordination and operational efficiency.

Circular Differentiation

The process of distinguishing entities or elements in a system based on their roles, attributes, or positions in a circular, rather than linear, hierarchy.

Lateral Differentiation

The way in which an organization segregates its operations and responsibilities across the same hierarchical level.