Assume the Short-Run Average Total Cost for a Perfectly Competitive

question 90

Multiple Choice

Assume the short-run average total cost for a perfectly competitive industry increases as the output of the industry expands. In the long run, the industry supply curve will:

• A) have a positive slope.
• B) have a negative slope.
• C) be perfectly horizontal.
• D) be perfectly vertical.

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Definitions:

Goodwill

An intangible asset that represents the portion of the business value that cannot be attributed to other business assets.

Loss on Disposal

The financial loss incurred when an asset is sold for less than its carrying value on the books.

Other Revenue

Income generated from activities not related to a company’s primary operations.

Fixed Assets

Long-lasting physical resources used in the functioning of a business, not expected to be spent or transformed into cash over the course of one year.