Under Perfect Competition, the Rate of Profit Tends to Be

question 90

Multiple Choice

Under perfect competition, the rate of profit tends to be ______ in all industries, so the marginal value of resources is ______ in all industries.

• A) different; different
• B) the same; the same
• C) the same; different
• D) different; the same

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Definitions:

Economic Value Added

A measure of a company's financial performance based on residual wealth, calculated by deducting a firm's cost of capital from its net operating profit.

Net Present Value

A calculation that determines the value of a series of future cash flows in today's dollars, used to assess the profitability or viability of an investment or project.

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders, but instead reinvested in the business.