When Profit-Maximizing Firms in Competitive Markets Are Earning Profits

question 166

Multiple Choice

When profit-maximizing firms in competitive markets are earning profits,

• A)market demand must exceed market supply at the market equilibrium price.
• B)market supply must exceed market demand at the market equilibrium price.
• C)new firms will enter the market.
• D)the most inefficient firms will be encouraged to leave the market.

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Definitions:

Necessary and Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws necessary and proper for carrying out its enumerated powers.

National Government

The political authority that governs an entire nation, as opposed to local or state governments.

Constitution

A set of fundamental principles or established precedents according to which a state or other organization is governed.

Freedom Caucus

A congressional interest group consisting of conservative Republican members of the United States House of Representatives seeking to push the party's agenda towards more extreme positions.