If in a Perfectly Competitive Industry, the Market Price Facing

question 119

Multiple Choice

If in a perfectly competitive industry, the market price facing a firm is below its average total cost but above average variable cost at the output where marginal cost equals marginal revenue

• A)the industry supply will not change.
• B)new firms are attracted to the industry.
• C)some existing firms will exit the industry.
• D)firms are breaking even.

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Definitions:

Modus Tollens

A method of logical argument that infers the falsehood of a proposition from the impossibility of its consequence.

Hypothetical Syllogism

A form of reasoning where if the first condition holds, then the second condition must follow, leading to a conclusion if the initial hypothesis is true.

Fossils

The preserved remains or traces of animals, plants, and other organisms from the remote past.

Hypothetical Syllogism

A logical argument composed of three categorical propositions, two premises followed by a conclusion, where if the first proposition (if A, then B) and the second proposition (if B, then C) are true, then the conclusion (if A, then C) necessarily follows.