In a Perfectly Competitive Market, If P > ATC in the Short

question 109

Multiple Choice

In a perfectly competitive market, if P > ATC in the short run, there is apt to be

• A) entry of new firms into the market.
• B) an accounting loss for existing firms.
• C) an inward shift in the industry supply curve.
• D) an upward pressure on price.

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Definitions:

Financial Economists

Specialists who study the ways in which money, financial instruments, and financial markets influence the economy.

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The science and art of making decisions about investment mix and policy, matching investments to objectives, asset allocation, and balancing risk against performance.

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The percentage of profit or loss on an investment over a specified period of time.

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The cognitive bias where people decide on options based on whether they are presented in a positive or negative way.