A competitive price-taker firm would be willing to remain in the industry in the long run at zero economic profit because
a. it would find it too difficult to exit from the industry in the long run.
b. accounting profit would be negative.
c. it is covering all costs, including the opportunity cost of capital and labor.
d. its sunk costs would prevent it from leaving the industry.
C
Economics
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In the short run a decrease in the costs of production makes
a) output rise and prices fall. b) output and prices fall. c) output and prices rise. d) output fall and prices rise.
Economics
Assume:
C = 40 + 0.8(Y - T) G = 10 I = 20 T = 0, where T are taxes. (a) Calculate Y at equilibrium. (b) Calculate C, I, and G at equilibrium. (c) Now assume, EX = 5 + 4EP /P IM = 10 + 0.1 (Y - T) - 3EP /P E = 3 P = 1.5 P = 2 Find equilibrium Y.
Economics