When a perfectly competitive firm is in long-run equilibrium, economic profits
A) are positive.
B) are zero.
C) are negative.
D) may be positive, zero or negative depending upon costs.
B
You might also like to view...
Normative economics answers the question, "What ought to be?" Positive economics predicts the consequences of alternative actions, answering the questions, "What is?" or "What will be?"
Indicate whether the statement is true or false
Diminishing marginal returns occurs when
A) all inputs are increased and output decreases. B) all inputs are increased and output increases by a smaller proportion. C) a variable input is increased and output decreases. D) a variable unit is increased and its marginal product falls.
For goods on which a relatively small portion of income is expended, _____
a. income effects will be small relative to substitution effects b. income effects will be large relative to substitution effects c. income effects will be about the same as substitution effects d. there will be no income effects.
Food and clothing tend to have
a. small income elasticities because consumers, regardless of their incomes, choose to buy relatively constant quantities of these goods. b. small income elasticities because consumers buy proportionately more of both goods at higher income levels than they buy at low income levels. c. large income elasticities because they are necessities. d. large income elasticities because they are relatively inexpensive.