Timmy's Trophies Operates in a Perfectly Competitive Market

question 317

Multiple Choice

Timmy's Trophies operates in a perfectly competitive market.If trophies sell for $20 each and average total cost per trophy is $15 at the profit-maximizing output level,then in the long run

• A) more firms will enter the market.
• B) some firms will exit from the market.
• C) the equilibrium price per trophy will rise.
• D) average total costs will fall.

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Definitions:

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Cameralism

An economic theory and administrative practice that emerged in Europe, primarily in German states during the 17th and 18th centuries, focusing on state intervention and management of the economy for the monarchy's welfare.

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A form of government in the United States characterized by a system of democracy with elected representatives, a president, and a separation of powers.

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