If Price Is Above the Average Variable Cost but Below

question 24

Multiple Choice

If price is above the average variable cost but below the average total cost of a representative firm in a competitive industry:

• A) there will be entry to the industry over time.
• B) there will be exit from the industry over time.
• C) the firms in the industry are just earning a normal rate of return.
• D) the firms in the industry are earning a supranormal rate of return.
• E) the industry is in long-run equilibrium.

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Definitions:

Standard Error

A statistical term that measures the accuracy with which a sample distribution represents a population using standard deviation.

Sample Proportions

The ratio of the number of times an event occurs to the total number of trials or instances.

Minority Students

Students who are part of a racial, ethnic, cultural, or socioeconomic group that is underrepresented or marginalized in a specific context.

Margin of Error

An expression of the amount of random sampling error in a survey's results, indicating a range within which the true value lies with a certain probability.