Assume That All Firms in a Particular Perfectly Competitive Industry

question 44

Multiple Choice

Assume that all firms in a particular perfectly competitive industry are earning economic profits.This will cause firms to ______ the industry,which will continue until ______.

• A) exit;economic losses occur
• B) enter;economic profits are zero
• C) enter;accounting profits are zero
• D) exit;economic profits are zero
• E) enter;economic profits are negative

---

Definitions:

Welfare Reform Act

Legislation aimed at changing the welfare system by encouraging work and reducing dependency on government benefits.

Social Security Act

A law enacted in 1935 to create a system of transfer payments in which younger, working people support older, retired people.

Poverty

A socioeconomic condition characterized by a significant lack of financial resources or income, leading to an inability to meet basic living needs.

Welfare Dependency

A situation where individuals or families rely on government welfare benefits as their primary source of income, often criticized for discouraging work effort.