Which of the Following Statements Is TRUE

question 104

Multiple Choice

Which of the following statements is TRUE?

• A) Entry and exit from an industry depend on the firm's market share.
• B) Fixed costs fall as firms produce more output, the so-called "spreading of the costs."
• C) High profits in an industry give entrepreneurs an incentive to enter that industry.
• D) A firm should enter an industry if average costs are less than producer surplus.

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Definitions:

Contracts

Legal agreements between two or more parties that are enforceable by law.

Invitation

An offer that suggests or requests someone's presence or participation, typically in an event or activity.

Offer

An expression of willingness to enter into a contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed.

Negotiate

The process of discussing and reaching a mutual agreement between parties with different interests.