Regardless of the Cost Structure of Firms in a Competitive

question 171

Multiple Choice

Regardless of the cost structure of firms in a competitive market, in the long run:

• A)firms will experience rising demand for their products
• B)firms will experience a less competitive market environment
• C)exit and entry is likely to lead to a horizontal long-run supply curve
• D)the marginal firm will earn zero economic profit

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Definitions:

Automated Machines

Mechanized devices programmed to perform tasks with minimal human intervention.

Human Interaction

The communication and exchange between individuals, including verbal and non-verbal behaviors, essential in social and business contexts.

Profitability Index

A ratio that calculates the relationship between the present value of future cash flows and the initial investment, used to assess project desirability.

Average Accounting Return

The average annual net income of an investment divided by the average book value of the investment.