In Perfect Competition, a Change in Fixed Cost

question 147

Multiple Choice

In perfect competition, a change in fixed cost:

• A) will have no effect on price in the short run.
• B) will have no effect on output in the short run.
• C) will induce entry or exit in the long run so that price will change enough to leave firms earning zero profits.
• D) is described by all of the above.

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Definitions:

Injury

Physical harm or damage to a person's body, or harm to one's reputation or emotions in a legal context.

Rescission

The process of unwinding a transaction, returning all parties to their pre-contractual state.

Fraud

The intentional deception or misrepresentation made by a person or entity to gain an unfair advantage or harm another party.

Misrepresentation

The act of giving false or misleading information about a material fact, which can lead another person to act to their detriment or alter their position.