In the Theory of Perfect Competition, the Assumption of Easy

question 6

Multiple Choice

In the theory of perfect competition, the assumption of easy entry into and exit from the market implies

• A)positive economic profits in the long run.
• B)losses in the long-run equilibrium.
• C)zero economic profits in the long run.
• D)zero economic profits in both the short run and the long run.
• E)positive economic profits in both the short run and the long run.

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Definitions:

U.S. Financial Assets

Economic resources or possessions of value owned or controlled by individuals or entities in the United States, including stocks, bonds, and bank deposits.

Living Beyond Its Means

A situation wherein an entity (like a government, company, or individual) spends more money than it receives in income or revenue, leading to debt accumulation.

Foreigners Own

The ownership of domestic assets such as property, companies, or government debt by non-resident individuals or entities.

Balance On Current Account

A measure of a country's international trade where the value of imports and exports of goods, services, and monetary transfers are accounted.