A firm will exit a competitive market when
A) costs force the marginal cost curve to shift to the left.
B) the long-run profit would be negative.
C) it can earn only earn a zero long-run profit.
D) Both B and C.
B
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The coupon rate on newly issued bonds is usually ________ for bonds with favorable tax treatment, such as municipal bonds, and ________ for bonds that are very risky, such as junk bonds.
A. lower; lower B. lower; higher C. higher; lower D. higher; higher
Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
For this question, assume that the economy is initially operating at the natural level of output. An increase in unemployment benefits will cause
A) an increase in the real wage in the medium run. B) a reduction in the real wage in the medium run. C) no change in the real wage in the medium run. D) ambiguous effects on the real wage in the medium run.