In the long run, a firm in a perfectly competitive market will
A) make zero economic profit, so that its owners earn a normal profit.
B) make zero normal profit but its owners will make an economic profit.
C) remove all competitors and become a monopolistically competitive firm.
D) incur an economic normal loss but not earn a positive economic profit.
E) remove all competitors and become a monopoly.
A
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What is the marginal propensity to consume for the economy described in Scenario 10.1?
a. 0.45 b. 0.85 c. 0.65 d. 0.35 e. Cannot be determined
Which of the following statements is not true? a. If social cost and private cost are the same, any externality that exists will be positive
b. If external costs are not zero, externalities exist. c. If somebody could buy the Pacific Ocean, fewer dolphins would be killed in fishing nets. d. Every production process generates market failure. e. When pesticides are used in producing food, the quantity of food produced is greater than the socially optimal level.