Assume That All Firms in This Industry Have Identical Cost

question 20

Multiple Choice

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. If the market supply curve is given by S3, then in the long run firms will:

• A)exit the market, leading the market supply curve to shift back to S2.
• B)exit the market, leading the market supply curve to shift back to S1.
• C)enter the market, leading the market supply curve to shift back to S2.
• D)neither enter nor exit the market, so the market supply curve will remain at S3.

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Definitions:

Internal Control Activities

Procedures and policies designed to safeguard a company’s assets, enhance the reliability of financial reporting, and ensure compliance with laws and regulations.

Globally

Refers to an action or concept considered or applied worldwide.

Petty Cash

A small amount of cash on hand used for covering minor and incidental expenses in an organization.

Payment

The act of transferring money or its equivalent in exchange for goods or services.