Refer to the diagram for a purely competitive producer. If product price is P 3 :
A. the firm will maximize profit at point d.
B. the firm will earn an economic profit.
C. economic profits will be zero.
D. new firms will enter this industry.
C. economic profits will be zero.
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The term "bottleneck" refers to
a. when increasing amounts of variable inputs must share a fixed input. b. "fixity" of some factor of production c. None of the above d. Both a and b
A rational decision maker engages in an activity if that activity is more attractive than the best alternative
a. True b. False
Which of the following disciplines is not a social science?
a. psychology b. mathematics c. economics d. political science e. sociology
An unregulated industry has a Lerner index of zero. These numbers:
A. reveal that social welfare would be improved by regulating the firms. B. are consistent with the industry being monopolistically competitive. C. reveal that social welfare would be improved by regulating the firms and are consistent with the industry being monopolistically competitive. D. are consistent with the industry being perfectly competitive.