The main reason(s) firms in a competitive market cannot earn positive profits in the long run is(are)
a. assets can quickly move in and out of the industry when demand fluctuates
b. an increase in demand leads to entry of firms which absorb the extra demand
c. a decrease in demand leads to exit of firms from the market such that there is no surplus
d. all of the above
d
You might also like to view...
An increase in government expenditure on goods and services ________ aggregate demand, shifting the aggregate demand curve ________ and potentially bringing the ________ phase of the business cycle
A) decreases; rightward; expansion B) increases; rightward; recession C) decreases; leftward; recession D) increases; rightward; expansion E) increases; leftward; recession
The total value of dividends paid out to shareholders by a firm is equal to
a. its total after-tax profits b. its total after-tax profits minus its retained earnings c. its total after-tax profits minus its bond payments d. its total after-tax profits plus its retained earnings e. the present value of the firm