In a Perfectly Competitive Market, the Process of Entry and Exit

question 465

Multiple Choice

In a perfectly competitive market, the process of entry and exit will end when (i)
Accounting profits are zero.
(ii)
Economic profits are zero.
(iii)
Price equals minimum marginal cost.
(iv)
Price equals minimum average total cost.

• A)(i) and (ii) only
• B)(ii) and (iii) only
• C)(ii) and (iv) only
• D)(i), (ii), (iii), and (iv)

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Definitions:

Correlation Coefficient

A numerical indicator showing the degree to which multiple variables co-vary.

Cause-and-Effect Relationship

A connection between two events where one event (cause) leads to the outcome of another event (effect).

Sampling Bias

A distortion in the outcome of a study due to the method in which samples are collected, resulting in a non-representative sample of the population.

Response Set

A tendency in survey respondents to answer questions in a particular pattern, regardless of the content.