If a Firm in a Perfectly Competitive Industry Experiences Persistent

question 82

Multiple Choice

If a firm in a perfectly competitive industry experiences persistent losses, in the long run it should

• A)shut down temporarily and wait for market conditions to change.
• B)exit the industry.
• C)raise its price to cover average total cost.
• D)continue to operate if it can raise the demand for its product through advertising and quality improvements.

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Definitions:

Back Matter

The final sections of a book, which may include appendices, glossaries, indexes, and bibliographies.

Primary Purposes

Primary purposes are the main objectives or reasons for which something is created, done, or exists.

Decision Matrix

A tool that helps in evaluating and prioritizing a list of options or alternatives based on a set of criteria.

Discussion

an interactive exchange of ideas and opinions among a group of people or between individuals.