What role does economic profit play in a competitive market?
What will be an ideal response?
Economic profit acts as a signal to entrepreneurs telling them where above normal returns are being earned. Economic profit serves society by directing resources to those activities for which society is currently paying a premium.
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The United States experienced a depression in which of the following decades?
A. the 1920s B. the 1940s C. the 1950s D. the 1970s
From 1997 to 2003, stock prices based on the Standard and Poor's index and the share of investment spending as a component of GDP tended to
A) move in the same direction. B) be unrelated to each other. C) move in opposite directions. D) both remain relatively unchanged.
Which of the following market models results in the highest level of consumer surplus, assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Cartel
A corporation exists as a separate legal entity that can be sued
Indicate whether the statement is true or false