Bonzo's success in the Easter Basket business has attracted more characters into the Easter Basket industry. If Easter Basket making is a constant cost industry, Bonzo
a. and the new entrants can all expect to be enjoying his current level of profits.
b. can expect his profits to be driven down to zero as new competitors push the price down.
c. can expect to have to shutdown his operation in the face of new competition.
d. will have to increase his price to make up for the loss of any sales to new competitors.
b. can expect his profits to be driven down to zero as new competitors push the price down.
You might also like to view...
It is ________ profit maximizing for firms to dump in foreign markets
A) never B) sometimes C) always
Suppose a perfectly competitive ukulele factory can produce 35 ukuleles at an output at which marginal cost equals marginal revenue. The price per ukulele is $1300 and the average total cost is $1500
What is the profit or loss that this furniture factory is earning? A) $700.00 B) -$7,000.00 C) -$1,050.00 D) -$450.00
A bond with a par value of $1,000 is traded at $1,500 . The coupon rate offered on the bond is 10 percent.The bond matures after a period of 5 years . The coupon paid to the bond holder after the end of the first year is:
a. $150. b. $100. c. $200. d. $50. e. $250
When society requires that firms reduce pollution, there is
a. a tradeoff because of reduced incomes to the firms' owners and workers. b. a tradeoff only if some firms are forced to close. c. no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. d. no tradeoff, since everyone benefits from reduced pollution.