Which of the Following Is True for Both Perfect Competition

question 20

Multiple Choice

Which of the following is true for both perfect competition and monopoly?​

• A)Firms produce a differentiated product.
• B)Firms cannot earn economic profit in the long run.
• C)Individual firms have no ability to control the price of their output but must accept the market price.
• D)Firms go out of business in the long run if total revenue cannot cover total cost.
• E)Firms usually earn economic profit in the long run.

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Definitions:

Treasury-bill Rate

The interest rate paid by U.S. Treasury bills, considered a benchmark for risk-free rates in the United States.

Fair Return

The reasonable profit that investors can expect to earn from their investment, considering the risk involved.

Market Signals

Indications or signs derived from market data that can suggest the future direction of market prices.

Sarbanes-Oxley Act

A U.S. federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.