In a competitive market, economic profits will
A. Cause new firms to leave the market.
B. Cause existing firms to expand production.
C. Potentially last a long time.
D. Not be possible, even in the short run.
Answer: B
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For a perfectly competitive firm, marginal revenue product is equal to price minus marginal revenue
a. True b. False Indicate whether the statement is true or false
Provide several examples of important taxes on labor in the United States. For a typical worker, what is the marginal tax rate on labor income once all the labor taxes are summed?
To be effective, a price ceiling must be above the equilibrium price.
Answer the following statement true (T) or false (F)
In the long run, perfectly competitive firms earn zero economic profit. Why do firms enter an industry when they know that in the long-run they will not earn any profit?
What will be an ideal response?