Suppose some firms in a perfectly competitive market are incurring an economic loss. As a result,
A) all the firms will eventually incur an economic loss.
B) some firms will leave the market and the price of the good will rise.
C) some firms will leave the market and the remaining firms' quantity will decrease.
D) the total market economic profit must equal $0.
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If the inverse demand curve a monopoly faces is p = 100 - 2Q, then profit maximization
A) is achieved when 25 units are produced. B) is achieved by setting price equal to 25. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided.
According to the graph shown, if the government restricts free trade, area G represents:
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price
for that good.
A. quota rents, which go to domestic producers.
B. quota rents, which go to foreign firms or governments.
C. government tax revenues, which go to the domestic government.
D. government tax revenues, which go to the foreign government.
The cost of debt can be found on a firm's
A) 1099 form. B) 5013c release. C) balance sheet. D) 10K.