A competitive price-taker firm would be willing to remain in the industry in the long run at zero economic profit because
a. it would find it too difficult to exit from the industry in the long run.
b. accounting profit would be negative.
c. it is covering all costs, including the opportunity cost of capital and labor.
d. its sunk costs would prevent it from leaving the industry.
C
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The Lerner index measures
A) a firm's potential monopoly power. B) the amount of monopoly power a firm chooses to exercises when maximizing profits. C) a firm's potential profitability. D) an industry's potential market power.
Entrepreneurs
A) and managers are found on the same organizational level. B) are usually found in small firms. C) are usually found in larger firms in order to access financial capital. D) are found in firms of all sizes.
The market equilibrium quantity:
A. is sometimes the socially optimal quantity B. is the socially optimal quantity C. maximizes total economic surplus D. is not the socially optimal quantity
If the price of Good X is $2, the price of Good Y is $10 and the consumer's budget is $100, which of the following combinations of Good X and Good Y would be on the budget line?
A. 50 units of Good X and 10 units of Good Y B. 10 units of Good X and 6 units of Good Y C. 25 units of Good X and 5 units of Good Y D. 30 units of Good X and 6 units of Good Y