In a Competitive Industry, Entry and Exit Decisions

question 78

Multiple Choice

In a competitive industry, entry and exit decisions:

• A) allow some firms to earn above-normal profits in the long run.
• B) ensure that labor and capital move across industries to optimally balance production.
• C) rely on demand signals, not price signals.
• D) move capital and labor away from profitable industries in order to maximize the total value of production.

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Definitions:

Commissions Paid

Payments made to employees or agents based on their sales volume or performance.

Cost Trends

Patterns or movements in cost over a period of time, indicating how expenses are changing and affecting profitability.

Yield Trends

Refers to the patterns or movements in the yield or return on investments, securities, or assets over a certain period.

Lean Manufacturing

A production methodology aimed at minimizing waste within manufacturing systems while simultaneously maximizing productivity.