As the level of competition in an industry increases,the price-cost margin approaches:

Question

Quizplus · Accepted Answer

As competition in an industry increases, firms are forced to lower their prices to remain competitive. This leads to a decrease in the price-cost margin, which is the difference between the price of a product and the cost of producing it. In a perfectly competitive industry, the price-cost margin would approach zero, as firms are unable to charge a higher price than their competitors without losing market share. Therefore, option A is the correct choice.

As the Level of Competition in an Industry Increases,the Price-Cost