If All Firms in a Perfectly Competitive Industry Are Experiencing

question 1

Multiple Choice

If all firms in a perfectly competitive industry are experiencing economic losses,then firms will:

• A)exit the industry,until economic profits are positive.
• B)exit the industry,until accounting profits equal zero.
• C)continue in the industry,hoping for better times.
• D)exit the industry,until economic profits equal zero.

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Definitions:

Direct Effects

Immediate impacts or outcomes resulting from a specific action or event.

Incremental Changes

Minor adjustments or improvements made to a product, process, or system over time.

Net Cash Outlays

Net cash outlays is a term used to describe the total cash expenditures a company makes, minus any cash inflows.

Additional Assets

Additional resources or properties acquired by a firm or individual which can be utilized for generating revenue or held as an investment.