In a Perfectly Competitive Market,the First Firm to Adopt a New

question 40

Multiple Choice

In a perfectly competitive market,the first firm to adopt a new cost-saving technological advance will

• A)buy more resources
• B)suffer an economic loss
• C)earn an economic profit until other competitors adopt the technology
• D)export to foreign markets
• E)supply low income neighborhoods

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Definitions:

Equity Funds

Investment funds that primarily invest in stocks, aiming to provide investors with growth or income through dividends and capital gains.

Borrowed Funds

Money that an entity obtains from another party with the promise to return the principal amount along with interest.

Present Value

The present value of a sum of money or series of cash flows expected in the future, discounted at a certain rate of return.

Net Present Value

The discrepancy between incoming and outgoing cash flows' current worth over a certain timeframe, utilized in long-term investment planning to evaluate an investment's profit potential.