If new firms are currently entering a perfectly competitive market, which of the following is true?
a. Existing firms are losing money.
b. Existing firms are earning positive economic profits.
c. Existing firms are just breaking even.
d. Impossible to predict.
B
You might also like to view...
The two loops in the circular-flow diagram represent
a. the flow of goods and the flow of services. b. the flow of dollars and the flow of financial assets. c. the flow of inputs into production processes and the flow of outputs from production processes. d. the flows of inputs and outputs and the flow of dollars.
Government officials tend to make:
A. better economic decisions than private individuals because of the wealth of information at their disposal. B. better economic decisions than private individuals because of the efficient processes and flexibility built into the government bureaucracy. C. inefficient choices because they lack the information necessary to accurately weigh marginal benefits and marginal costs. D. inefficient choices because the invisible hand directs them away from the resource allocation where marginal benefits equal marginal costs.