The Free Entry and Exit of Firms in a Competitive

question 8

Multiple Choice

The free entry and exit of firms in a competitive price-searcher market guarantees that

• A) both economic profits and economic losses can persist in the long run.
• B) both economic profits and economic losses disappear in the long run.
• C) economic profits, but not economic losses, can persist in the long run.
• D) economic losses, but not economic profits, can persist in the long run.

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Definitions:

Abraham Maslow

A renowned American psychologist who is famous for developing the hierarchy of needs theory, which suggests that psychological well-being is based on meeting essential human needs.

Cognitive Psychology

A branch of psychology that studies mental processes including how people think, perceive, remember, and learn.

Problem Solving

The process of identifying a problem, generating possible solutions, and implementing a solution.

Neo-Freudians

Psychologists who were influenced by and extended Freud's theories, typically focusing more on social and environmental factors.