Asked by
elliot guerbaai
on Oct 27, 2024
Verified
Which scenario is MOST likely to cause firms to exit a perfectly competitive industry?
A) Consumer tastes and preferences for this product get stronger,making them more interested in the good.
B) A technological advance allows all firms to produce more efficiently.
C) The price of a key variable input falls.
D) Consumer income falls.
Perfectly Competitive Industry
Describes a market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller has control over prices.
Variable Input
An input whose quantity the firm can vary at any time (for example, labor).
- Describe how the entry and exit of companies contribute to the attainment of long-run equilibrium in a market characterized by perfect competition.
Verified Answer
AV
Learning Objectives
- Describe how the entry and exit of companies contribute to the attainment of long-run equilibrium in a market characterized by perfect competition.
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