Asked by
Cathy Jamero
on Oct 27, 2024
Verified
In a perfectly competitive market:
A) the price will change to reflect any change in production cost.
B) the existence of profits leads firms to exit the industry,while losses lead firms to enter the industry.
C) economic profits are positive in the long run.
D) perfect competition generates prices greater than marginal costs.
Production Cost
The total expenses incurred in the manufacture of a product or the delivery of a service, including raw materials, labor, and overhead expenses.
Economic Profits
Profits that exceed the opportunity costs of all inputs, reflecting earnings beyond the next best alternative.
- Familiarize oneself with the interdependencies of prices, production costs, and supply in the context of perfect competition.
Verified Answer
MR
Learning Objectives
- Familiarize oneself with the interdependencies of prices, production costs, and supply in the context of perfect competition.