In the Short Run

question 18

Multiple Choice

In the short run

• A) all firms that earn a loss will shut down.
• B) if current firms are earning a profit, new firms will enter the industry.
• C) firms act to minimize losses or maximize profits.
• D) All of the above are correct.

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Definitions:

Foreign Competition

The presence of competing products or services from other countries in a domestic market.

Domestic Producers

Individuals or entities within a country that produce goods or services.

Import Substitution

A strategy aimed at reducing foreign dependency through the domestic production of previously imported goods.

Infant Industries

Newly established industries that may not yet be competitive in the global market without protection or support from the government.