Suppose a Perfectly Competitive Market Is in Short-Run Equilibrium

question 2

Multiple Choice

Suppose a perfectly competitive market is in short-run equilibrium.Firms that are incurring a ________ economic loss ________.

• A) persistent; increase their output to increase their profit
• B) temporary; exit the industry
• C) temporary; decrease their production but definitely stay open
• D) persistent; exit the industry and shift the market supply curve leftward
• E) persistent; exit the industry and shift the market supply curve rightward

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Definitions:

Amount Invested

The total sum of money committed into a venture, asset, or security by an investor or group of investors.

Investment Date

The specific date on which an investment was made or acquired, which is important for calculating holding periods, interest, dividends, and capital gains.

Capital Investment Analysis

The process of evaluating the advisability of investing in long-term assets, based on potential returns.

Present Value

A rephrased definition denoting the current value of a future amount of money discounted at a particular rate of return.