When Market Conditions in a Price-Taker Market Are Such That

question 17

Multiple Choice

When market conditions in a price-taker market are such that firms cannot cover their production costs,

• A) the firms will suffer long-run economic losses.
• B) the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits.
• C) some firms will go out of business, causing prices to rise until the remaining firms can cover their production costs.
• D) all firms will go out of business, since consumers will not pay prices that enable firms to cover their production costs.

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Definitions:

Self-serving Bias

The common tendency to attribute our successes to internal factors while attributing failures to external ones.

Attribution Style

A concept in psychology that refers to how individuals explain the causes of behavior and events, often categorized into internal (dispositional) or external (situational) attributions.

Fundamental Attribution Error

A cognitive bias that involves overestimating the effect of personality and underestimating the influence of situational factors when explaining others' actions.

Weiner

Refers to Bernard Weiner, a psychologist known for his work on attribution theory, which deals with how people interpret and attribute causes to events and behaviors.