In a Perfectly Competitive Market,when the Price Is Below the Minimum

question 70

Multiple Choice

In a perfectly competitive market,when the price is below the minimum average total cost for all firms:

• A)higher accounting profits may be earned elsewhere.
• B)firms will likely leave the market.
• C)the price will eventually rise once enough firms have left the market.
• D)All of these are true.

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Definitions:

Raw Material Purchases

The total cost of materials bought that are intended to be used in the production of goods.

Cost of Goods Sold

The immediate expenses linked to the manufacturing of products that a company sells.

Sales Forecast

An estimate of the quantity of goods or services that an organization expects to sell in a particular period.

Raw Material Purchases Cost

The total amount spent on buying raw materials necessary for production.