Economists would consider a firm with ______ to be making a normal profit.
a. a zero economic profit
b. a zero accounting profit
c. an economic profit that exceeds its accounting profit
d. equal accounting and economic profits
a. a zero economic profit
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If a firm is producing an output rate at which marginal cost is equal price, the firm
A) is maximizing profits. B) should increase its output level. C) should reduce its output level. D) will not be covering its fixed cost.
Banks that wish to borrow required reserves can turn to the federal funds market
a. True b. False Indicate whether the statement is true or false
In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is:
A. positive. B. zero. C. negative. D. normal.
Product differentiation allows a firm to charge a higher price because the residual demand curve facing the firm
A) is more elastic than the residual demand curve without product differentiation. B) is less elastic than the residual demand curve without product differentiation. C) is horizontal. D) shifts to the left.