Which of the following is true of perfectly competitive firms?
a. For a perfectly competitive firm, as long as the price derived from expanded output exceeds the marginal cost of that output, the expansion of output creates additional economic profits.
b. Producing at the profit-maximizing output level means that a firm is actually earning economic profits
c. A competitive firm earning zero economic profit will be unable to continue in operation over time.
d. A perfectly competitive firm will operate in the short run only at price levels greater than or equal to average total costs.
a
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Referring to Figure 19.2, the effect of an increase in Japanese prices is represented by a movement from point
A) d to c. B) c to d. C) a to d. D) a to b.
With a monopolist's outcome, consumer surplus is:
A. higher than that of a competitive market. B. lower than that of a competitive market. C. the same as that of a competitive market. D. Any of these is possible.