If perfectly competitive firms are making an economic profit, then
A) the market is in its long-run equilibrium.
B) new firms enter the market and the equilibrium profit of the firms already in the market decreases.
C) new firms enter the market and the equilibrium profit of the firms already in the market increases.
D) firms exit the market and the economic profit of the surviving firms in the market decreases.
E) firms exit the market and the economic profit of the surviving firms in the market increases.
B
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A ________ exists when naturally occurring incentives encourage sufficient numbers of people to act in a way that makes everybody worse off
Fill in the blank(s) with correct word
Organic food might be good for your health but in light of the 2008 downturn in the economy and falling incomes, consumers are buying less organic and more non-organic food. Based on these events, what is TRUE?
A) Organic food is a normal good and non-organic food is an inferior good. B) Organic food is an inferior good and non-organic food is a normal good. C) Organic food is a normal good and non-organic food is a normal good. D) Organic food is an inferior good and non-organic food is an inferior good.
In general does international diversification benefit investors?
A) yes, because it allows them to diversify their risk across many countries B) no, because it creates the additional problem of country risk C) yes, because it enables much greater profits through arbitrage opportunities D) no, because it subjects them to legal regulation in additional markets
In the one-period competitive model we have been studying
A) both consumption and total factor productivity are exogenous. B) consumption is exogenous and total factor productivity is endogenous. C) consumption is endogenous and total factor productivity is exogenous. D) both consumption and total factor productivity are endogenous.