If a firm is in a perfectly competitive world but decides to charge a higher price than its competitors,
A) the firm's profits will be zero or negative, and the firm will fail in the long run.
B) the firm's profits will be zero or negative, and the firm will fail in the short run.
C) the firm's profits will be positive or negative, and the firm will fail in the short run.
D) the firm's profits will be positive or negative, and the firm will fail in the long run.
A
You might also like to view...
An economy that self-corrects a recessionary gap will experience falling nominal wages, rising real wages, and falling output
a. True b. False Indicate whether the statement is true or false
If government policy makers were worried about the inflationary potential of the economy, which of the following would not be a correct fiscal policy change?
a. Increase consumption taxes b. Increase government purchases of goods and services. c. Decrease government purchases. d. None of the above.
Which statement is correct regarding allocative efficiency in monopolistic competition?
a. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will shift to the left. b. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will shift to the right. c. When new competitors exit a monopolistically competitive industry, the demand curve for each firm will shift to the left. d. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will not be affected.
Which of the following is not a characteristic of monopolistic competition?
a. a large number of sellers b. firms are price takers c. free entry into the market d. a differentiated product