Which of the Following Would Be Most Likely If Firms

question 129

Multiple Choice

Which of the following would be most likely if firms in a competitive price-searcher market were earning economic profit?

• A) Production inefficiencies would persist until the profit was eliminated.
• B) Firms would decrease their rate of output in the short run, causing a decline in profitability in the market.
• C) New firms would enter the market, resulting in fewer sales by existing firms.
• D) All firms in the market would continue to produce at their current levels and continue to charge the same price.

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Definitions:

Quartile

A statistical term describing a division of a data set into four defined intervals based upon the values of the data and how they compare to the entire set.

Annual Family Income

The total amount of money earned by all members of a family in one year, from all sources before taxes.

Income Quintile

A statistical measure dividing the population into five equal groups according to their income levels, to analyze economic inequality.

U.S. Bureau of Census

A principal agency of the U.S. Federal Statistical System responsible for collecting and analyzing data related to the population, economy, and society of the United States.