Which of the Following Is True

question 327

Multiple Choice

Which of the following is true?

• A) When firms in a price-taker market are earning zero economic profit, they will shut down.
• B) When firms in a price-taker market are earning positive economic profits, new firms will enter the industry causing the market price to fall until the firms in the industry are earning only zero economic profit.
• C) When firms in a price-taker market are earning economic losses, some firms will exit the industry causing the market price to rise until the remaining firms are earning zero economic profit.
• D) Both b and c are true.

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Definitions:

Social Groups

Collections of individuals who interact and share certain characteristics, beliefs, values, or a sense of unity and belonging.

Social Learning

This refers to the process of learning behaviors, attitudes, and skills through observation and imitation of others in a social context.

Observational Learning

Learning that occurs by observing the behavior of others and the outcomes of those behaviors, without direct experience.

Vicarious Conditioning

A process of learning through observing the consequences of another's actions, which then influence the observer's own behavior.