The owner of a perfectly competitive firm is currently earning an economic profit of zero. This owner
A) should shut down since profits of zero are not good.
B) should raise the price of the product to increase profits.
C) is covering all of his fixed costs.
D) will continue producing in the short-run but will shut down in the long run if profits do not increase.
Answer: C
You might also like to view...
As the manager of a hotel, you recently noticed that one of your suppliers has started advertising their prices and has changed the specifications of its product to match those of its rivals. The actions of your supplier suggest that any of the following might be occurring except which one?
A) The supplier is attempting to increase its profits. B) The supplier is part of a cartel. C) The supplier is paying treble damages. D) The supplier is attempting to engage in tacit collusio
According to real business cycle theorists, new technology raises real productivity, which allows for lower costs and prices
Indicate whether the statement is true or false
Figure 10-2
At which point in is the economy at long-run equilibrium?
a.
J
b.
F
c.
G
d.
H
Economic profit affects:
A. the allocation of resources but not the level of resource use. B. the level of resource use but not the allocation of resources. C. the allocation of resources and the level of resource use. D. neither the allocation of resources nor the level of resource use.