Suppose when a market has four firms, average economic profit is $1,000 per month. When the market has five firms, the average economic profit is -$50 per month. This suggests that
A) the long-run equilibrium number of firms is between four and five.
B) the long-run equilibrium number of firms is four.
C) the long-run equilibrium number of firms is five.
D) there is no long-run equilibrium in this market as profits can never be zero.
A
You might also like to view...
Although Europe is not an OCA, some areas in the European Union would probably meet the criteria. Which of the following would meet them?
A) France, Sweden, and Denmark B) the former Eastern bloc nations of Yugoslavia, Romania, and Bulgaria C) the Netherlands, Denmark, and Britain D) Italy, Germany, Austria, Belgium, the Netherlands, and Luxembourg
What is the interest rate on a 12-month U.K. certificate of deposit if the dollar return on the certificate is 4 percent and the dollar has appreciated 9 percent against the British pound?
a. 15 percent b. 13 percent c. 9 percent d. 5 percent e. 4 percent