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:

Idiosyncrasy Credit

A concept in social psychology that allows individuals to deviate from group norms without sanction if they have previously contributed positively to the group.

Legitimate Power

This refers to the authority someone has due to their position or role within a formal organizational setting.

Accumulate

To gather or pile up something gradually as time passes, often leading to a large quantity.

Exert Influence

The act of using one's power, authority, or personal appeal to affect or change someone's beliefs, attitudes, or actions.