As Exit from a Perfectly Competitive Industry That Is Currently

question 180

Multiple Choice

As exit from a perfectly competitive industry that is currently unprofitable pushes up the market price, producers will move from a situation where price ____ average total cost to one where price ____ average total cost.

• A)exceeds; equals.
• B)is less than; equals.
• C)equals; is less than.
• D)equals; exceeds.
• E)exceeds; is less than.

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Definitions:

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant, and a significant commodity in global trade.

Cream

The top layer of milk that is richer in fat and can be skimmed off, used metaphorically to refer to the best or choicest part of something.

Marginal Utilities

Additional satisfaction derived from consuming an extra unit of a product, emphasizing the declining utility with increased consumption.

Optimal Consumption Bundle

The combination of goods and services that maximizes a consumer's utility for a given income and prices, based on their preferences.