In the long run, each firm in a competitive industry earns
a. zero accounting profits.
b. zero economic profits.
c. positive economic profits.
d. Both a and b are correct.
b
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An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:
a. a decrease in equilibrium price and a decrease in equilibrium quantity. b. a decrease in equilibrium price and an increase in equilibrium quantity. c. an increase in equilibrium price and a decrease in equilibrium quantity. d. an increase in equilibrium price and no change equilibrium quantity.
A current value for the CPI of 125 means that the
A. consumer must now pay $1.25 to purchase goods that cost $1.00, on the average, in the base year. B. average price level currently is 125 times higher than the average price level during the base year. C. purchasing power of a given money income is 25 percent larger during the base year than when the index was formulated. D. purchasing power of money has increased 125 percent over time.