If a Typical Firm in a Perfectly Competitive Industry Is

question 177

Multiple Choice

If a typical firm in a perfectly competitive industry is earning profits, then

• A)all firms will continue to earn profits.
• B)new firms will enter in the long run causing market supply to decrease, market price to rise, and profits to increase.
• C)new firms will enter in the long run causing market supply to increase, market price to fall, and profits to decrease.
• D)the number of firms in the industry will remain constant in the long run.

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Definitions:

ALCOA Case

A landmark antitrust case in the United States involving the Aluminum Company of America, which set standards for monopolistic practices.

Antitrust Legislation

Antitrust legislation comprises laws intended to regulate competitive conduct among businesses, prevent monopolies, and promote fair competition.

Sherman Act

The Sherman Act is a landmark federal statute in the antitrust law of the United States, prohibiting monopolistic business practices and promoting competition.

Monopoly Power

The ability of a single company or entity to control or dominate an entire market, preventing competition.