In competitive price-searcher markets, short-run economic profits will lead to
a. long-run economic profits.
b. the exit of firms from the market and the eventual restoration of zero long-run economic profits.
c. the entry of additional firms into the market and the eventual restoration of zero long-run economic profits.
d. the entry of additional firms into the market, which increases the demand for the product of each firm in the market.
C
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Refer to Scenario 12.1. What is the probability of Simon trying to rescue the man and Paula not helping?
A) 9% B) 21% C) 49% D) 70%
The capture theory of regulation predicts that
A) regulation helps producers to maximize profits. B) regulators capture the firm's economic profit and transfer it to consumers as consumer surplus. C) regulators eliminate the deadweight loss a monopoly can create. D) resources are used efficiently. E) regulators capture the firm's economic profit and transfer it to themselves.