Tommy's Tires Operates in a Perfectly Competitive Market

question 284

Multiple Choice

Tommy's Tires operates in a perfectly competitive market.If tires sell for $50 each and average total cost per tire is $40 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 tire will rise.
• D) average total costs will fall.

---

Definitions:

Economic Development

The process by which the overall health, wellbeing, and economic capabilities of a country improve, often through targeted policies and investments.

Available Resources

Assets, materials, and inputs that can be utilized to produce goods and services.

Per Capita Incomes

The mean income received by an individual in a specific region or nation, determined by dividing the sum of all incomes by the number of people.

Birth Rates

The number of live births per thousand of population per year.