A perfectly competitive firm is maximizing profits in the short run. This implies that the firm is earning the most economic profits possible, which
A) must be positive.
B) must be either zero or positive.
C) can be positive, negative, or zero.
D) exist at the point at which price equals total cost.
C
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Which of the following sets of goods might, under the right circumstances, be substitutes for water?
A) Milk and juice B) Beer and wine C) Stones and bricks D) A, B, and C above are all potential substitutes for water. E) A and B above are potential substitutes for water, but C (stones and bricks) can never be substitutes for water in the real world.
Everything else held constant, the interest rate on municipal bonds rises relative to the interest rate on Treasury securities when
A) income tax rates are lowered. B) income tax rates are raised. C) municipal bonds become more widely traded. D) corporate bonds become riskier.