In the Long Run,competitive Firms MUST Be Profit Maximizers Because

question 75

Multiple Choice

In the long run,competitive firms MUST be profit maximizers because if they do not maximize profits,

• A) they will not survive.
• B) they will not be price takers.
• C) they will attract entry.
• D) the profits that they do earn will only cover variable costs.

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Definitions:

Single-Index Model

A simplified way to estimate the return of a stock using the performance of a single market index as the primary factor.

Macro Risk

The potential for financial loss in markets that arises from adverse changes in macroeconomic conditions.

Micro Risk

A type of risk that affects a very small segment of the market or an individual company, as opposed to the entire economy or financial system.

Unanticipated Events

Occurrences or outcomes that were not expected or predicted, often causing significant impact on plans or expectations.