In the long run, in a perfectly competitive industry:
A. the number of firms in the industry will increase.
B. economic loss tends to persist.
C. economic profit tends to persist.
D. economic profit and loss are driven to zero by entry and exit.
Answer: D
You might also like to view...
According to the policy irrelevance proposition, real Gross Domestic Product (GDP) is determined by
A) the economy's long-run aggregate supply curve. B) a combination of fiscal policy and monetary policy. C) the rate of inflation only. D) the economy's aggregate demand curve.
Assuming all else equal, what is likely to happen to the demand curve for reserves in an economy if it goes through a period of rapid expansion?
A) There will be a n upward movement along the demand curve for reserves. B) The demand curve for reserves will shift to the left. C) There will be a downward movement along the demand curve for reserves. D) The demand curve for reserves will shift to the right.
A shift in the aggregate planned expenditure curve as a result of an increase in the price level results in
A) no movement along the aggregate demand curve and no shift in the aggregate demand curve. B) an upward movement along the aggregate demand curve. C) a downward movement along the aggregate demand curve. D) a rightward shift in the aggregate demand curve. E) a leftward shift in the aggregate demand curve.
Which of the following occurs if the expected profit increases?
A) Investment demand increases and the demand for loanable funds curve shifts rightward. B) The quantity of investment demanded decreases and there is a movement up along the demand for loanable funds curve. C) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve. D) The savings increases and the supply of loanable funds curve shifts rightward. E) Investment demand decreases and the demand for loanable funds curve shifts leftward.