Technological Change Allows Perfectly Competitive Firms to ________ and Leads

question 72

Multiple Choice

Technological change allows perfectly competitive firms to ________ and leads to ________.

• A) lower their costs; lower prices for consumers
• B) raise their prices; higher prices for consumers
• C) lower their costs; higher prices so the firms can earn economic profits in the long run
• D) raise their costs; higher prices and maximum profits in the long run
• E) lower their costs; deadweight loss

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Definitions:

Fair Value Through Profit

A method where financial assets are revalued to their current market prices on the balance sheet, and fluctuations are reported in the profit or loss statement.

Other Comprehensive Income

Components of comprehensive income that are not part of net income, including items that have not yet been realized as cash, such as unrealized gains or losses on investments.

Amortized Cost

Amortized cost refers to the accounting practice of gradually writing off the initial cost of an asset over its useful life or the repayment period of a loan.