In a perfectly competitive market, firms will earn zero economic profits in the long run.
Answer the following statement true (T) or false (F)
True
At the long-run equilibrium when there is zero economic profit (P = ATC), entry and exit cease, therefore maintaining zero profits.
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Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expect
A) the quantity demanded is Q2. B) a surplus will occur. C) price to decline until an equilibrium is achieved at P0. D) consumers to bid against each other for goods and force the price even higher.
In the 1980s, tax rates were cut, government revenues fell below expectations, and there was a then-historic peacetime deficit
a. True b. False Indicate whether the statement is true or false
Which of the following could effectively destroy a monopoly structure?
a. the appearance of just one close substitute good b. its exclusive access to resources c. its patent on a new technology d. a government restriction on entry e. a merger of two once-competing firms
In the United States during the 1970s, expected inflation
a. rose substantially. b. rose slightly. c. fell slightly. d. fell substantially.