Free Entry and Exit of Firms Is a Characteristic Of

question 112

Multiple Choice

Free entry and exit of firms is a characteristic of:

• A)all industries in the U. S. economy.
• B)perfectly competitive industries.
• C)centralized economies.
• D)industries in which firms are earning positive economic profit.

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Definitions:

Net Income

The amount of profit remaining after all expenses, taxes, and costs have been deducted from total revenue.

Break-even Point

The point at which cost or expenses and revenue are equal, resulting in neither profit nor loss.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials.

Fixed Costs

Expenditures that do not change over a short period of time, regardless of the level of production or activity.