If firms in a competitive price-searcher market are currently experiencing economic profits, then over time,
a. new firms will enter the market, and the current firms will experience a decrease in demand for their products until zero economic profit is again restored.
b. new firms will enter the market, and the current firms will experience an increase in demand for their products until zero economic profit is again restored.
c. some existing firms will exit the market, and the remaining firms will experience an increase in demand for their products until zero economic profit is again restored.
d. some existing firms will exit the market, and the remaining firms will experience a decrease in demand for their products until zero economic profit is again restored.
A
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Betty and Ann live on a desert island. With a day's labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts
Ann's opportunity cost of producing 1 coconut is ________ and she should specialize in the production of ________. A) 8 fish per coconut; fish B) 2 fish per coconut; coconuts C) 6 fish per coconut; coconuts D) 0 fish per coconut; coconuts
If the Federal Reserve System lowers the legal reserve requirement, it forces banks to hold repaid loans as required reserves instead of lending them again, thus shrinking the money supply
Indicate whether the statement is true or false