In Short Run Equilibrium in a Perfectly Competitive Industry Whose

question 61

Multiple Choice

In short run equilibrium in a perfectly competitive industry whose firms are earning economic profits, a firm:

• A)has no incentive to change its output.
• B)has no incentive to change its plant size.
• C)has no incentive to expand its factory.
• D)has no incentive to leave the industry.
• E)has no incentive to do any of the above.

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Definitions:

Taxation

The system through which government collects money from individuals and businesses to fund public services.

Policy Decisions

Decisions taken by an organization or government based on guiding principles or regulations intended to direct actions and outcomes.

Management

The act of coordinating and overseeing the activities of a business or organization to achieve defined objectives.

Board Of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.