If firms in a perfectly competitive industry are earning an economic profit, then in the ________, firms will ________ the industry
A) short run; enter
B) long run; enter
C) short run; exit
D) long run; exit
E) More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry.
B
You might also like to view...
There is __________ problem with deposit insurance as the insurer shares disproportionately in the __________ risk of banking
A) an adverse selection; upside B) an adverse selection; downside C) a moral hazard; upside D) a moral hazard; downside
When individuals make decisions about how much money and bonds to hold, which of the following variables affects those decisions?
A) the real interest rate only B) the nominal interest rate only C) the expected inflation rate only D) either the real interest rate or the expected inflation rate E) both the nominal and real interest rates