If a Purely Competitive Constant-Cost Industry Is Realizing Economic Profits

question 148

Multiple Choice

If a purely competitive constant-cost industry is realizing economic profits, we can expect industry supply to

• A)increase, output to rise, price to fall, and profits to fall.
• B)increase, output to rise, price to rise, and profits to fall.
• C)decrease, output to fall, price to rise, and profits to fall.
• D)increase, output to fall, price to fall, and profits to fall.

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Definitions:

Interest Revenue

Income earned by a company or individual from lending money or making investments that pay interest.

Income Statements

A financial statement that shows a company's revenues, expenses, and profit over a specific period, reflecting the company's financial performance.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects debts from its customers by dividing net credit sales by the average accounts receivable.

365-Day Year

A method used in finance and accounting to standardize the number of days in a year for calculations, ensuring consistency.