Refer to Figure 23

question 132

Multiple Choice

Refer to Figure 23.2 for a perfectly competitive firm.Given the current market price of $100, we expect to see

• A)Firms exit from the industry, driving up the market price.
• B)Firms exit from the industry, driving down the market price.
• C)No change in the number of firms in the industry and no change in the market price.
• D)Firms enter the industry, driving down the market price.

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Definitions:

Capital Lease

A lease agreement that grants a lessee the benefits and risks of ownership of the asset, typically recognized on the balance sheet.

Balance Sheet

A “snapshot” of an organization’s financial position at a given moment.