Which Scenario Is MOST Likely to Cause Firms to Exit

question 301

Multiple Choice

Which scenario is MOST likely to cause firms to exit a perfectly competitive industry?

• A)Consumer tastes and preferences for this product get stronger,making them more interested in the good.
• B)A technological advance allows all firms to produce more efficiently.
• C)The price of a key variable input falls.
• D)Consumer income falls.

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Definitions:

Compensate

To compensate means to make amends for something lost or damaged, or to provide a person with something in exchange for an effort, loss, or inconvenience they have experienced.

Culture

The shared customs, arts, social institutions, and achievements of a particular nation, people, or other social group.

Captivity

The condition of being imprisoned or confined, often used in reference to animals kept in zoos or as pets.

Arbitrary

Driven by unpredictable choices or individual inclinations rather than by reasoned decision-making processes or organized methods.