Which of the following is true?
a. Monopolists, monopolistically competitive firms and perfectly competitive firms all earn positive economic profits in the long run.
b. Monopolists, monopolistically competitive firms and perfectly competitive firms all earn zero economic profits in the long run.
c. Only monopolists and monopolistically competitive firms, but not perfectly competitive firms, can earn positive economic profits in the long run.
d. Monopolists, monopolistically competitive firms and perfectly competitive firms can potentially all earn positive economic profits in the short run.
d
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Suppose two duopolists operate at zero marginal cost. The market demand is p = a - bQ. If firm 1 is the Stackelberg leader, what level of output will it choose?
A) q1 = (a - bq2 )/2b B) q1 = (a - 2bq2 )/2b C) q1 = a/b D) q1 = a/2b
Over a year, a nation's GDP at current prices rose by 15 percent while the price index increased from 100 to 110. GDP at constant prices rose by about:
A. 3 percent B. 5 percent C. 7 percent D. 9 percent