The Firms in a Perfectly Competitive Are Making an Economic

question 480

Multiple Choice

The firms in a perfectly competitive are making an economic profit when new firms enter. The entry shifts the short-run market supply curve ________, the market price ________, and each firm's economic profit ________.

• A) leftward; rises; decreases
• B) rightward; rises; increases
• C) rightward; falls; decreases
• D) leftward; falls; decreases

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Definitions:

Selling and Administrative Expenses

Costs related to selling products and managing the business, excluding production costs.

Multiple-Step Income Statement

An income statement that separates operating revenues and operating expenses from non-operating revenues, expenses, and other gains and losses.

Gross Profit

The difference between sales revenue and the cost of goods sold, representing the profitability of a company's core business activities.

Single-Step Statement

A simplified income statement format that sums all revenues and gains together and subtracts all expenses and losses in one step to arrive at net income.