If Price Exceeds Average Costs Under Pure Competition,____ Firms Will

question 16

Multiple Choice

If price exceeds average costs under pure competition,____ firms will enter the industry,supply will ____,and price will be driven ____.

• A) more; decrease; down
• B) more; decrease; up
• C) more; increase; down
• D) more; increase; up
• E) none of the above

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Definitions:

Cost Report

A detailed financial document that outlines the actual costs incurred during a project or for business operations over a defined period, often used for tracking and controlling expenditures.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors are valid.

Car Washing Labour Cost

The expenses associated with labor that are incurred during the process of washing cars.

Least Squares Regression

A statistical method for estimating the relationships among variables by minimizing the square differences between observed and predicted values.