If All Firms in a Perfectly Competitive Industry Are Experiencing

question 104

Multiple Choice

If all firms in a perfectly competitive industry are experiencing economic losses,then firms will

• A) enter the industry,seeking new opportunities.
• B) exit the industry,stopping when accounting profits equal zero.
• C) continue in the industry,hoping for better times.
• D) exit the industry,stopping when economic profits equal zero.
• E) exit the industry,stopping when economic profits are positive.

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Definitions:

Calculation

The process of determining something by mathematical or logical methods.

Ratio

A quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.

Equivalent Sales Increase

A metric that assesses additional revenue by comparing the effects of various marketing or operational initiatives as if they were translated directly into sales.

Profit Margin

A financial metric that represents the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.