Which of the following statements regarding the long-term equilibrium is TRUE?
A) As new firms enter a market, each existing firm increases the quantity it produces.
B) Firms leave a market if they are making zero economic profit.
C) Entry and exit stop when firms are making an economic profit.
D) Entry and exit stop when firms make zero economic profit.
D
You might also like to view...
Suppose you are working four nights per week at your courses and your grade point average is 3.5. You want a higher grade and decide to study an extra night each week. Your GPA now rises to 3.8
What is your marginal benefit from studying for one additional night a week?
An increase in the expected future marginal product of capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
The laissez-faire system relies on the price mechanism to allocate resources.
Answer the following statement true (T) or false (F)
As income declines, induced consumption ________________.
Fill in the blank(s) with the appropriate word(s).