If a Typical Firm in a Perfectly Competitive Industry Is

question 135

Multiple Choice

If a typical firm in a perfectly competitive industry is incurring losses, then

• A)all firms will continue to lose money.
• B)some firms will exit in the long run, causing market supply to decrease and market price to rise, increasing profits for the remaining firms.
• C)some firms will exit in the long run, causing market supply to decrease and market price to fall, increasing losses for the remaining firms.
• D)some firms will enter in the long run, causing market supply to increase and market price to rise, increasing profit for all firms.

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Definitions:

Motivation

The psychological forces that determine the direction of a person's behavior, influencing their level of effort and persistence.

Behavioural Framework

refers to models and theories that explain or predict human actions based on individual behaviors and environmental factors.

Compensation

The total of all rewards provided by an employer to employees in return for their services, including salary, bonuses, and benefits.

Output-Related Pay

A compensation model where an employee's earnings are directly tied to the quantity or quality of their work output, encouraging productivity and performance.