Asked by
Miranda Dickie
on Dec 11, 2024
Verified
The ability of price-taker firms to freely expand or contract their businesses and to enter or exit the market means that
A) prices will always be high enough to generate positive economic profit.
B) resources that would be more valuable elsewhere will be trapped, unproductively, in a particular industry.
C) resource owners cannot move their resources to other areas where they would be more highly valued.
D) resources that would be more valuable elsewhere will not be trapped, unproductively, in a particular industry.
Price-Taker Firms
Companies that accept the market price as given and have no influence to change the price of the goods or services they sell.
Expand
Refers to the process of growth or increase in size, volume, number, or scope.
Contract
A legally binding agreement between two or more parties that outlines obligations, rights, and conditions under which a transaction or exchange will occur.
- Clarify the conditions necessary for the optimal allocation of resources in competitive environments.
Verified Answer
MV
Learning Objectives
- Clarify the conditions necessary for the optimal allocation of resources in competitive environments.