When Market Conditions in a Competitive Industry Are Such That

question 235

Multiple Choice

When market conditions in a competitive industry are such that firms cannot cover their total production costs, then

• A)the firms will suffer long-run economic losses.
• B)the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits.
• C)some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs.
• D)all firms will go out of business, since consumers will not pay prices that enable firms to cover their total production costs.

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Definitions:

Brainstorming

A creative group problem-solving technique that involves generating a large number of ideas or solutions without immediate evaluation.

Successful

Achieving the desired outcome, goals, or objectives effectively and efficiently.

Rules

Established guidelines or principles governing behavior or conducting activities within specific contexts.

Different Interests

Diverse or varying priorities and desires among individuals or groups in a negotiation or decision-making process .