If Firms in a Perfectly Competitive Industry Are Earning an Economic

question 99

Multiple Choice

If firms in a perfectly competitive industry are earning an economic profit,then in the ________,firms will ________ the industry.

• A) short run; enter
• B) long run; enter
• C) short run; exit
• D) long run; exit
• E) More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry.

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Definitions:

Types of Stock

Refers to the different categories of stock that a company issues, commonly including common stock and preferred stock.

Stockholder

An individual or entity that owns shares in a corporation, thus holding a portion of the corporation's equity.

Company's Assets

This encompasses all items of value owned by a company, including cash, real estate, equipment, and intellectual property, which are utilized in generating revenue.

Limited Liability

Freedom of stockholders from personal liability for the debts of the corporation.