What Will Happen in a Perfectly Competitive Market If There

question 37

Multiple Choice

What will happen in a perfectly competitive market if there is an increase in the cost of labour, ceteris paribus?

• A) Firms will now make supernormal profits that will attract new entrants to the market.
• B) The short-run average total cost curve will shift upward reducing firms' profits.
• C) The supply curve will shift to the right reducing prices in the market further.
• D) The average revenue curve will shift upward by the extent of the increase in labour costs.

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Definitions:

Semantically

Pertaining to the meanings or interpretations of words and sentences.

Structurally

Pertaining to the arrangement or organization of parts within a whole, often used in reference to physical, social, or abstract constructs.

Elaboration

The process of adding more detail to a message, making it more complex and often more persuasive.

Clustering

A process of grouping a set of objects or individuals based on similarities, often used in data analysis to identify patterns or classifications.