In the long run, firms in a perfectly competitive market:
A. produce a quantity that maximizes profits.
B. choose the level of output that minimizes average total costs.
C. earn zero economic profit.
D. All of these are true.
Answer: D
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Suppose there is a high inequality in household income between the highest and the lowest income groups in one country. In response, the government raises the income tax for the highest income group and provides subsidies to the lowest-income group
What would happen to the Lorenz curve as a result of the government programs? Explain.
Which of the following causes the market demand curve for a good to shift?
A. The cost of factors of production. B. The number of buyers in the market. C. The expectations about future sales. D. A producer's income.
In recent years, people have benefited from greater amounts of leisure time. This trend:
A. has caused GDP to rise. B. has caused GDP to fall. C. made GDP fluctuate randomly. D. is not accounted for in GDP.
GDP statistics do not reveal anything about
A. the economy's production of goods and services. B. economic growth. C. global warming's impact on the economy. D. productivity.