Which of the Following Helps in Determining Whether a Business

question 73

Multiple Choice

Which of the following helps in determining whether a business thrives?

• A) Markets.
• B) Free enterprise.
• C) Competition.
• D) All of these answer choices are correct.

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Definitions:

Income Effect

Change in consumption of a good resulting from an increase in purchasing power, with relative prices held constant.

Substitution Effect

Change in consumption of a good associated with a change in its price, with the level of utility held constant.

Perfectly Competitive

A market structure characterized by a large number of small sellers and buyers, homogeneous products, and freedom of entry and exit.

Profit Maximizing

A process or strategy used by businesses to determine the best output and pricing levels in order to achieve the highest profit.