In a Perfectly Competitive Market, Any Larger Than Normal Returns

Multiple Choice

In a perfectly competitive market, any larger than normal returns to transferable capital are reduced when:

A) the government repeals an excess-profits tax.
B) businesses are able to pay other factors of production less.
C) new firms enter the industry, increasing the supply of the product and lowering product price.
D) old firms leave the industry, decreasing the supply of the product and lowering product price.
E) other factors of production agree to a smaller reward for their contribution to production.