When all perfectly competitive firms in a market or all monopolistically competitive firms in a market make zero economic profit,
a. no firms will enter the market
b. all firms will exit the market
c. a monopolist will take over the market
d. the market demand shifts to the left
e. the price of the good produced will increase in the long run
A
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Markets are generally more effective at providing ________ and governments are most effective at providing ________
A) pure public goods; common pool resources B) pure private goods; pure public goods C) common pool resources; club goods D) club goods; pure private goods
The argument that it is necessary to protect a new industry to enable it to grow into a mature industry that can compete in world markets is known as the
A) national security argument. B) diversity argument. C) infant-industry argument. D) environmental protection argument. E) national youth protection argument.
What happens to the absolute value of the marginal rate of substitution as you move down a convex (bowed toward the origin) indifference curve?
A) It could increase or decrease. B) It remains constant. C) It decreases. D) It increases.
A profit-maximizing firm in a perfectly competitive market will always produce a quantity of output that: a. minimizes the per-unit cost of production
b. is expected to maximize total revenue. c. maximizes the amount by which total revenue exceeds total cost. d. brings average total cost and price into equality.