Refer to the Graph Shown, Which Depicts a Perfectly Competitive

question 73

Multiple Choice

Refer to the graph shown, which depicts a perfectly competitive firm. If the price of the product is $3:

• A) new firms will enter the industry.
• B) the firm will just cover its opportunity cost of production.
• C) the industry will be in long-run equilibrium.
• D) the firm may continue to operate in the short run but will exit the industry in the long run.

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Definitions:

Discontinuity Effect

A phenomenon in group behavior where individuals in groups are more likely to engage in aggressive or competitive behavior than individuals acting alone.

Hostile Competition

A form of competition that includes negative behaviors, such as sabotage or aggression, to win or gain an advantage.

Peaceful Societies

Communities or cultures that are characterized by low levels of violence and a high degree of social harmony and cooperation.

Cooperative Societies

Organizations owned and run jointly by its members, who share the benefits or profits equally or according to their contribution.