Zero economic profits for a perfectly competitive firm in the long run means
A. the firm must exit the industry.
B. the firm is in equilibrium.
C. the firm will shut down until the market improves.
D. average revenue is insufficient to cover long-run average cost.
Answer: B
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Refer to Table 16.2. Real GDP for Fredonia for 2016 using 2015 as the base year equals
A) $2,750. B) $3,500. C) $4,325. D) $5,500.
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase. B) The price would increase, the demand would decrease, and the supply would increase. C) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. D) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase.
If the demand curve for comic books is expressed as Q = 10,000 * p-1, then demand has a unitary elasticity
A) only when p = 10,000. B) only when p = 100. C) always. D) never.
The kinked demand curve is composed of two segments of two demand curves that intersect. The two segments that make up the kinked demand curves are
a. both related to industry demand b. derived by subtracting the firm's demand curve from the market demand curve and adding it to the industry demand curve c. derived from the firm demand curve and the industry demand curve d. the least elastic segment above price and the more elastic segment below price e. the more elastic segment above price and the least elastic segment below price