Post Utme Greenfield University 2017 Economics Question 11

Practice objective / multiple choice question 11 from the 2017 Post Utme Greenfield University Economics examination.

Post Utme Greenfield University 2017 Economics Objective / Multiple Choice
Question 11 POST_UTME_GREENFIELD_UNIVERSITY • 2017 • ECONOMICS • objective

Consider a perfectly competitive market with multiple firms producing a homogeneous product. If the market price falls below the average total \cost of production, what will be the likely outcome for the firms in the market?

Answer Options

A. The firms will increase production to take advantage of the lower market price.
B. The firms will decrease production to reduce their losses.
Correct Answer C. The firms will exit the market to avoid incurring losses.
D. The firms will increase their prices to match the market price.
Correct Answer
C
Correct Option:
The firms will exit the market to avoid incurring losses.

About This Question

This is Post Utme Greenfield University 2017 Economics Question 11. It is one of the objective questions from the 2017 Post Utme Greenfield University Economics examination.

View More Post Utme Greenfield University 2017 Economics Questions More Post Utme Greenfield University Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support