When new firms enter a perfectly competitive market,
a. economic profits of existing firms will continue to be zero.
b. entering firms will earn zero economic profit upon entry into the market.
c. existing firms may see their costs rise if more firms compete for limited resources.
d. prices will rise as existing firms raise prices to keep new firms out of the market.
c
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The idea that a large national debt is "mortgaging the future of our children and grandchildren" is misleading because:
a. it is the Federal Reserve that will be responsible for making interest payments on the debt. b. future generations will have to bear the opportunity costs of the resources that are used today. c. future generations will not be liable for the interest obligations of the national debt. d. future generations will inherit the interest income as well as the interest obligations.
If a market is contestable, then
A. long-run economic profits are minimal due to inefficiency. B. long-run economic profits are zero. C. short-run and long-run economic profits are zero. D. positive economic profits are maximized due to the efficient production spurred by the threat of entry.