In long-run equilibrium for a competitive firm, economic profits:
A. will be positive.
B. will be negative.
C. will be zero.
D. may be positive, negative, or zero.
Answer: C
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A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:
A) division. B) addition. C) composition. D) false cause.
If average labor productivity decreases, then the same number of employed workers will always produce:
A. less output per person. B. more total output. C. more output per person. D. less total output.
Refer to the above figure. The firm is operating using MRP0. An increase in productivity has occurred. The relevant curve for the firm after the increase in productivity
A. is MRP0. B. is MRP1. C. is MRP2. D. could be MRP1 or MRP2 depending upon whether the firm was earning a positive profit.
Free trade ________ living standards by ________ economic efficiency
A) raises; increasing B) lowers; decreasing C) raises; equalizing D) lowers; eliminating