Answer the following questions true (T) or false (F)
1. If in the long run a firm makes zero economic profit, it should exit the industry.
2. A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000. If the prevailing market price is $48, the number of firms and the industry's output will decrease in the long run.
3. Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves. This suggests that the microwave industry is a decreasing-cost industry.
1. FALSE
2. TRUE
3. TRUE
You might also like to view...
The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. The U.S
Department of Justice would classify the market for cookies in Eatsweetland as A) competitive. B) uncompetitive. C) moderately competitive. D) monopolistic.
Dole Co operates in a monopolistically competitive market. To try to earn an economic profit, Dole Co will
A) prevent other firms from entering the market. B) increase its product's price. C) continually seek to differentiate its product. D) increase output.