Assume the Wool Industry Is Perfectly Competitive

question 59

Multiple Choice

Assume the wool industry is perfectly competitive. Why is it difficult for a wool producer to make excess profits in the long run?

• A) the fact that wool producers are ʺprice takersʺ
• B) the assumption that wool producers in the industry do not ʺdifferentiateʺ their products
• C) the fact that the demand curve facing each wool producer is perfectly elastic
• D) There is free entry into the wool industry.

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Definitions:

Reinforcement Strategy

A technique employed to encourage desired behavior by using incentives or consequences, often used in organizational behavior management.

Performance Feedback

Information provided to individuals or groups regarding their performance, intended to guide future improvements.

Informal Acknowledgement

Recognition or validation of an individual's contributions or achievements in a non-formal or unofficial manner, often contributing to personal satisfaction and motivation.

Extinguish

In behavioral psychology, to diminish or eliminate a learned response, typically by discontinuing reinforcement of the response.