In Perfect Competition, P = MC Is the Condition That

question 55

Multiple Choice

In perfect competition, P = MC is the condition that

• A) guarantees that firms will make an economic profit.
• B) ensures that firms produce the right things.
• C) encourages firms to enter an industry.
• D) holds only in the long run.

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Definitions:

High Liquidity

Refers to assets that can quickly be converted into cash with minimal impact on their price.

High Risk

Referring to investments or activities with a greater than usual potential for loss or that may involve significant uncertainty.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.

Investment Account

A financial account that holds securities, cash, and other investments for investors, typically managed by a financial institution or investment firm.