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:

Content Validity

The extent to which a test or measure accurately assesses all aspects of the concept it intends to measure.

Improper Standardization

The faulty or inconsistent application of norms, rules, or measurements in research or assessment processes.

Criterion-related Validity

The extent to which a measure is related to an outcome or criterion, indicating how well the test predicts a specific aspect of a person's behavior or performance.

Mechanical Aptitude

Mechanical aptitude refers to a person's ability to understand and apply mechanical concepts and principles, often assessed for careers involving machinery or engineering tasks.