In the Short Run in Perfect Competition

question 24

Multiple Choice

In the short run in perfect competition,

• A)each firm can sell whatever quantity it wishes to sell at the market price
• B)the market demand curve cannot shift
• C)new firms will enter the market if existing firms are earning economic profits
• D)new firms will enter the market if existing firms are earning normal profits
• E)existing firms will exit the market if they are suffering losses

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Definitions:

Cost Ledger

A subsidiary ledger that records the individual costs of production, providing detailed cost information.

Period Cost

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred, such as selling and administrative costs.

Factory Lunchroom

An area within a manufacturing facility allocated for employee meals and breaks.

Receiving Report

A document used to confirm the receipt of goods delivered, detailing the quantity and condition of the items.