Perfectly competitive firms ____ earn zero economic profit in long-run equilibrium because ____
a. always; firms in perfectly competitive industries always maximize output and so flood the market until the equilibrium price of output is driven to zero
b. sometimes; the demand curve for an individual perfectly competitive firm may or may not cross the company's long-run average total cost curve at its lowest point
c. always; firms enter whenever their economic profit is positive and exit whenever it's negative, so in long-run equilibrium economic profit must always be zero
d. never; no firm would be willing to produce if it received zero economic profit
c
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Because of unseasonably cold weather, orange crops were destroyed in Florida. This statement indicates that
A. the demand for apple juice will decrease. B. the amount of orange juice will decrease. C. demand for oranges will necessarily rise. D. equilibrium quantity of oranges will rise.
"Price fixing" is always illegal
Indicate whether the statement is true or false
An oligopolist that cheats on a collusive agreement by reducing price will quickly be forced out of the industry by its competitors
a. True b. False
It is efficient to increase the output of computers if
a. society considers the extra computers more valuable than other goods foregone to produce the computers. b. the opportunity cost of more computers is greater than their marginal utility. c. computer production can be increased only if production of other goods is decreased. d. the price of the computers is equal to their average cost.