If the Representative Firm in a Purely Competitive Industry Is

question 60

Multiple Choice

If the representative firm in a purely competitive industry is in short-run equilibrium and, at its current output level, its marginal cost exceeds its average total cost, then we can conclude that

• A) the firm is suffering economic losses.
• B) the firm is not maximizing profits in the short run.
• C) some firms will exit the industry in the long run.
• D) other firms will enter the industry in the long run.

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Definitions:

Higher Resources

Refers to the availability of increased or superior assets, whether financial, material, or human, for the purpose of achieving greater objectives or improving operations.

Social Conduct

Refers to behaviors and actions that are considered acceptable and appropriate according to societal norms and values.

Behaviors

Actions or reactions of an individual or group in response to external or internal stimuli, often studied in psychology and sociology to understand and predict patterns.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates, including natural, social, and cultural factors.