The owner of a perfectly competitive firm is currently earning an economic profit of zero. This owner
A. should raise the price of the product to increase profits.
B. is covering all of his fixed costs.
C. will continue producing in the short-run but will shut down in the long run if profits do not increase.
D. should shut down since profits of zero are not good.
Answer: B
You might also like to view...
In the above figure, if the price is $12 per unit, how many units will a profit maximizing perfectly competitive firm produce?
A) 0 B) 20 C) 30 D) 35
IRA stands for Individual Retirement Asset
a. True b. False
If a central bank increases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
a. both the price level and output b. the price level but not output c. output but not the price level d. neither output nor the price level
Which of the following best describes the income velocity of money?
A. V = Y B. V = Ms/PY C. V = PY/Ms D. V = PMs