In the long run, firms in a perfectly competitive market:
A. produce a quantity that maximizes profits.
B. earn zero economic profit.
C. choose the level of output that minimizes average total costs.
D. All of these are true.
D. All of these are true.
You might also like to view...
The figure above shows the market for coffee. The ________ price that producers must be offered to get them to produce 30 million pounds of coffee per month is ________
A) maximum; $2.50 B) minimum; $2.50 C) maximum; $4.00 D) minimum; $4.00
In the long run, a monopolistically competitive firm will set price:
a. at the intersection of the marginal cost and demand curves. b. at the intersection of the average total cost and demand curves. c. higher than the competitive level, but lower than the monopoly price. d. higher than the marginal cost, but lower than average total cost.
Real GDP
a. is the current dollar value of all goods produced by the citizens of an economy within a given time. b. measures economic activity and income. c. is used primarily to measure long-run changes rather than short-run fluctuations. d. All of the above are correct.
The fact that price subsidies reduce economic surplus implies that:
A. we can find an alternative policy that will make both the rich and the poor better off. B. the quantity bought and sold in the market will fall. C. price subsidies help the rich but not the poor. D. price subsidies are not effective at lowering prices.