In long-run equilibrium, the typical perfectly competitive firm will:
a. earn zero economic profit.
b. change plant size in the long run.
c. change output in the short run.
d. do any of these.
a
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Which of the following economic variables is affected when the government adopts countercyclical fiscal policy?
A) Government spending B) Bank reserves C) Interest rates D) M2 measure of money supply
Explain what is meant by a revaluation of a currency. Under what circumstances would a country devalue its currency?
What will be an ideal response?
Refer to Figure 7-2. At the efficient equilibrium
A) economic surplus is zero. B) economic surplus is negative. C) economic surplus is minimized. D) economic surplus is maximized.
Why do rent controls cause deadweight losses?
a. fewer apartments are rented than in the competitive market b. more apartments are rented than in the competitive market c. tenants have to pay more than in the competitive market d. landlords can charge more than in the competitive market