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:

Implied Trust

A trust created by a court when (1) an express trust fails and the court can imply the existence of a trust from certain behavior or (2) the law steps in to protect someone from fraud or other wrongdoing.

Involuntary

Actions or reactions that occur without a person's conscious decision or control, often referencing physical or legal circumstances.

Oral Will

A will spoken out loud to witnesses in situations where a written will cannot be made, recognized as legally valid in some jurisdictions under specific conditions.

Revoking

The act of officially cancelling or withdrawing something, such as a law, contract, or privilege.