In the long run firms will ________ as long as there are more economies of scale and new firms will enter the industry as long as they earn ________.
A. expand; positive economic profits
B. expand; zero profits
C. contract; positive economic profits
D. contract; zero profits
Answer: A
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If the supply of bottled water decreases and at the same time the demand for bottled water increases, the equilibrium price ________ and the equilibrium quantity ________
A) might rise, fall, or stay the same; decreases B) might rise, fall, or stay the same; increases C) falls; increases D) rises; might increase, decrease, or stay the same
Using the rule of 72, calculate the average annual growth rate of GDP needed for a country to double its size in just four years?
a. 12 percent b. 4 percent c. 18 percent d. 72 percent e. 28 percent
An unexpected increase in the demand for accountants will lead to
a. an increase in their earnings and an expansion in the future supply of accountants. b. a decrease in the incentive of students to prepare for a career in accounting. c. a reduction in the current earnings of accountants, followed by a reduction in the future supply of accountants. d. a reduction in the employment of accountants but not their wage rates.
When looking at this graph for the welfare effects of a subsidy, c + g would equal ______.
a. gains to the consumer
b. deadweight loss
c. cost to the taxpayers
d. total welfare gains