In a Perfectly Competitive Market, Any Larger Than Normal Returns

question 65

Multiple Choice

In a perfectly competitive market, any larger than normal returns to transferable capital are reduced when:

• A)the government repeals an excess-profits tax.
• B)businesses are able to pay other factors of production less.
• C)new firms enter the industry, increasing the supply of the product and lowering product price.
• D)old firms leave the industry, decreasing the supply of the product and lowering product price.
• E)other factors of production agree to a smaller reward for their contribution to production.

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