When Entry and Exit Behaviour of Firms in an Industry

question 149

Multiple Choice

When entry and exit behaviour of firms in an industry does not affect a firm's cost structure:

• A)the long-run market supply curve must be upward-sloping
• B)the long-run market supply curve must be downward-sloping
• C)the long-run market supply curve must be horizontal
• D)we can't tell anything about the shape of the long-run market supply curve

---

Definitions:

Profit-Maximizing

The process or strategy of adjusting production and sale practices to achieve the highest possible profit.

Short Run

A period in economics where at least one input is fixed while others are variable, affecting the level of output or production.

Personalized Sweaters

Sweaters that are customized to include specific designs, colors, or patterns, often featuring names, initials, or unique graphics chosen by the purchaser.

Average Variable Cost

Average Variable Cost is calculated by dividing the total variable costs of production by the quantity of output produced; it varies with production levels.