In perfectly competitive markets, economic losses are the signal for firms to exit from the industry.
Answer the following statement true (T) or false (F)
True
If firms are experiencing economic losses (P < ATC), some firms may exit the market in the long run.
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Signals are
A) used by economic decision-makers to inform others about their plans. B) the method by which government planners inform economic decision-makers about the types of decisions they should make. C) the method by which firms determine their profit maximizing quantity. D) compact ways of conveying to economic decision makers information needed to identify industries where more resources are needed.
Other things the same, if a price change causes total revenue to change in the opposite direction, demand is:
A. perfectly inelastic. B. relatively elastic. C. relatively inelastic. D. of unit elasticity.