Which of the Following Is True of a Perfectly Competitive

question 57

Multiple Choice

Which of the following is true of a perfectly competitive market?

• A) If economic profits are earned then the price will fall over time.
• B) In long-run equilibrium P > MR = SRMC < SRATC = LRAC.
• C) A constant-cost industry exists when the entry of new firms has a significant effect on their cost curves.
• D) If the input prices rise the long-run supply curve is downward sloping.

Identify and construct payoff and opportunity loss tables.

Calculate optimum decisions using EMV and EOL criteria.

Interpret the significance of negative values in opportunity loss tables.

Recognize incentive programs and worker safety laws as external factors (states of nature) affecting business decisions.

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Definitions:

Self-deception

The act of lying to oneself or convincing oneself of a truth that is actually false.

Societal Norms

The shared expectations and rules that guide the behavior of people within social groups and communities.

Attribution Theory

The psychological theory that explains how people infer the causes of their own and others' behavior, attributing it to either internal dispositions or external situations.

F-ratio

A statistical measure used in ANOVA tests to compare the variance among group means to the variance within groups.