Consider the Textile Industry,which We Assume to Be a Competitive

question 26

Multiple Choice

Consider the textile industry,which we assume to be a competitive industry,and which experiences continuous cost-reducing technological change.Which of the following statements best describes this industry?

• A)High-cost textile mills will co-exist with low-cost mills as long as the revenue for the high-cost mills is covering their variable costs.
• B)The price of the product is determined by the minimum ATC of the lowest-cost plants.
• C)All textile mills in the industry will be earning zero economic profits or losses.
• D)Both A and B
• E)Both B and C

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Definitions:

Colonial Governors

Officials appointed to govern a colony, representing the interests of the colonizing country.

Colonial Assemblies

Legislative bodies in the American colonies where elected representatives of the colonists gathered to make local laws, levy taxes, and ensure their interests were represented.

Freedom of the Press

The freedom to distribute and share thoughts, beliefs, and information without interference or suppression from the government.

Religious Fundamentalism

A strict adherence to specific theological doctrines typically in reaction against what its followers perceive as a dangerous modernism, leading to an emphasis on purity and the desire to return to a previous ideal from which believers have begun to drift.