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11 Dec 2019
In a competitive market with identical firms:
a. free entry and exit into the market require that firms earn zero economic profit in the long-run even though they may be able to earn positive economic profit in the short-run.
b. firms can earn positive economic profit in the long-run if the long-run market supply curve is upward-sloping.
c. an increase in demand in the short-run will result in a new price above the minimum average total cost, allowing firms to earn a positive economic profit in both the short-run and long-run.
d. firms cannot earn positive economic profit in either the short-run or long-run.
In a competitive market with identical firms:
a. free entry and exit into the market require that firms earn zero economic profit in the long-run even though they may be able to earn positive economic profit in the short-run.
b. firms can earn positive economic profit in the long-run if the long-run market supply curve is upward-sloping.
c. an increase in demand in the short-run will result in a new price above the minimum average total cost, allowing firms to earn a positive economic profit in both the short-run and long-run.
d. firms cannot earn positive economic profit in either the short-run or long-run.
Alice SejakeLv10
25 Jan 2021
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Related questions
Monopolistically competitive firms
| a. | are guaranteed to earn a short-run economic profit |
| b. | may earn short-run economic profits, although long-run economic profit is typically zero |
| c. | may earn economic profit both in the short run and in the long run |
| d. | earn zero economic profit both in the short run and in the long run |
| e. | can only earn an economic profit in the inelastic portion of their demand curves |
