Today, firms in a perfectly competitive market are making an economic profit. In the long run, firms will ________ the market until all firms in the market are ________
A) exit; covering only their total fixed costs
B) enter; making zero economic profit
C) exit; producing at the minimum point on their long-run average cost curve
D) enter; making zero normal profit
B
You might also like to view...
A situation in which money buys the same amount of goods and services in different currencies is called
A) a fixed exchange rate. B) purchasing power parity. C) exchange rate surplus. D) exchange rate equilibrium. E) exchange rate balance.
A movement along a demand curve is called a change in
a. income b. quantity demanded c. demand d. tastes e. population
If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:
A. increase by 10 percent. B. decrease by a factor of ten. C. double. D. be half as large as it was before the increase.
Suppose you are deciding whether or not to increase production. You are currently making a profit. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to less than that, and your average fixed costs will decrease. Finally, your average revenue will increase to $10, but your increase in revenue will be $9. You should
A. increase production by at least 1 unit. B. redo the math associated with decreasing production because that may result in greater profit. C. increase production by exactly 1 unit. D. leave production unchanged because profit is maximized where you are.