If Firms in a Perfectly Competitive Market Are Incurring Economic

question 146

Multiple Choice

If firms in a perfectly competitive market are incurring economic losses,then as time passes firms ________ and the market ________.

• A) enter; demand curve shifts leftward
• B) enter; supply curve shifts rightward
• C) exit; demand curve shifts leftward
• D) exit; supply curve shifts rightward
• E) exit; supply curve shifts leftward

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Definitions:

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares historical financial data over a series of reporting periods, using the increase or decrease in absolute amounts and percentages to identify trends.

Income Statement

A financial statement that reports a company’s financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Unadjusted Trial Balance

A preliminary report that lists all accounts and their balances before any adjustments are made for accruals, deferrals, and errors.

Proper Order

A systematic arrangement or sequence that things follow which conforms to a set of rules or a standard procedure.