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?
Even though in the long run firms earn zero profit, in the interim period they can earn economic profits. Breaking even in the long run means that a firm earns a return comparable to what it could earn in an alternative use of its resources.
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Which is the largest cash transfer program for the poor?
A. TANF B. Medicare C. SSI D. Medicaid
The tool most frequently relied on by the Fed is
A. interest rate changes. B. changing the money multiplier. C. changing the discount rate. D. open-market operations. E. changing the reserve ratio.
When demand is elastic
A) changes in price and changes in total revenue move in the same direction. B) there is no relationship between changes in price and changes in total revenue. C) changes in price and changes in total revenue move in opposite directions. D) for any change in price, total revenue will not change.
In the above table, net exports equal a
A) surplus of $200 billion. B) deficit of $200 billion. C) surplus of $100 billion. D) deficit of $100 billion.