If a Firm Is in a Perfectly Competitive World but Decides

question 77

Multiple Choice

If a firm is in a perfectly competitive world but decides to charge a higher price than its competitors,

• A) the firm's profits will be zero or negative, and the firm will fail in the long run.
• B) the firm's profits will be zero or negative, and the firm will fail in the short run.
• C) the firm's profits will be positive or negative, and the firm will fail in the short run.
• D) the firm's profits will be positive or negative, and the firm will fail in the long run.

---

Definitions:

Noncontrolling Interests

A portion of equity in a subsidiary not held by the parent company, representing the minority ownership's share of the subsidiary's net assets and income.

Net Income

The total profit of a company after subtracting all expenses from revenues, including taxes and operating expenses.

Domestic Corporations

Companies that are incorporated under the laws of a specific country and operate within that country.

Noncontrolling Interest

The portion of equity in a subsidiary not owned by the parent company, also known as minority interest.