In a Perfectly Competitive Factor Market, a Firm Faces A(n)

question 53

Multiple Choice

In a perfectly competitive factor market, a firm faces a(n) :

• A) market-determined price for each factor it hires.
• B) perfectly elastic demand curve for each factor.
• C) inelastic supply curve of each factor.
• D) upward-sloping demand curve for its output.

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Definitions:

Rental Cost

The amount of money that must be paid regularly to lease a property or equipment.

Economic Profit

The distinction between aggregate income and comprehensive charges, covering both manifest and inferred expenses.

Opportunity Cost

The value of the best alternative foregone when making a decision.

Equity Capital

Funds raised by a company through the sale of stock in the company, representing ownership interests in the corporation.