Which of the Following Statements Is TRUE

question 89

Multiple Choice

Which of the following statements is TRUE?

• A) The presence of positive economic profit in a perfectly competitive market is consistent with the characteristics of a long-run competitive equilibrium.
• B) When firms in a perfectly competitive market incur economic losses, some will exit in the long run, thereby shifting the industry supply curve rightward.
• C) If a profit-maximizing firm in a perfectly competitive market is making an economic profit, then it must be producing at a level of output where price is greater than average total cost.
• D) If a profit-maximizing firm in a perfectly competitive market is incurring an economic loss, then it must be producing at a level of output where price is greater than average total cost.

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Definitions:

Sherman Act

A landmark federal statute in the antitrust law of the United States, passed in 1890, that outlaws monopolistic business practices.

U.S. Corporations

Entities that are incorporated under the laws of a particular state in the United States, distinguished by having legal identities separate from their owners.

Trade Barriers

Measures imposed by governments or public authorities to regulate foreign trade and protect domestic industries from foreign competition.

Import Quotas

Limits set by a government on the amount or number of goods that can be imported into a country over a set period of time.