Under Perfect Competition,if an Industry Is Characterized by Positive Economic

question 1

Multiple Choice

Under perfect competition,if an industry is characterized by positive economic profits in the short run

• A)firms will leave the market in the long run and the short-run supply curve will shift outward.
• B)firms will enter the market in the long run and the short-run supply curve will shift outward.
• C)firms will enter the market in the long run and the short-run supply curve will shift inward.
• D)firms will leave the market in the long run and the short-run supply curve will shift inward.

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Definitions:

Profitable Output

The production or output level from a business operation that generates a financial gain or profit.

Firm

An organization engaged in commercial, industrial, or professional activities, typically with the aim of earning a profit.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period when all factors of production can vary.

Output

Refers to the quantity of goods or services produced in a given time period by a firm or economy.