In the short run, each firm in a perfectly competitive market is free to
a. increase its plant size
b. vary its output level within its existing capacity
c. exit the industry without losses
d. set a price above the market price
e. decrease its plant size
B
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If there is unemployment in an economy, then the
A) economy is operating at an unattainable point. B) production possibilities frontier will shift inwards. C) production possibilities frontier must be bowed inward. D) economy is producing at a point inside the production possibilities frontier. E) production possibilities frontier will shift outwards.
The corn market is perfectly competitive, with thousands of corn farmers. In the 2000s, the price of corn soared so that new farmers entered the corn market
Initially, entry ________ the economic profit of the initial corn farmers and in the long run the initial corn farmers ________. A) increased; made an even greater economic profit than initially B) decreased; made zero economic profit C) increased; made zero economic profit D) decreased; incurred an economic loss E) increased; made an economic profit