The Average Percentage Markup in the Economy

question 149

Multiple Choice

The average percentage markup in the economy

• A) is greater,the more competitive are market conditions
• B) is greater,the less competitive are market conditions
• C) is unaffected by the competitive conditions of the economy
• D) tends to be highly unstable from year to year
• E) tends to be stable from year to year,ensuring that the price level is stable from year to year

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Definitions:

Output

The amount of goods or services produced by a business, industry, or economy within a given period.

Perfectly Competitive Industry

A perfectly competitive industry is a market structure where many firms offer identical products, there are no barriers to entry or exit, and each firm has no influence over the market price.

Economic Profit

The distinction between overall income and all expenses, encompassing both direct and assumed costs.

LRAC Curves

Long-Run Average Cost curves, which show the average cost per unit of output when all inputs, including capital, are variable, illustrating economies or diseconomies of scale.