Asked by Victoria Nguyen on Jun 24, 2024
Verified
Firms in an industry will not earn long-run economic profits if
A) fixed costs are zero.
B) the number of firms in the industry is fixed.
C) there is free entry and exit of firms in the industry.
D) production costs for a given level of output are minimized.
Long-Run Economic Profits
Profits earned by a firm when all resources are adjusted to their long-term optimal level, indicating the firm is in equilibrium and cannot earn higher profits by altering production.
Free Entry And Exit
A situation in a market where firms can enter and leave the industry without facing significant barriers or costs, promoting competition.
Industry
A sector of the economy that involves the production and distribution of goods or services within a particular field.
- Familiarize yourself with the conditions conducive to reaching a long-run equilibrium in a monopolistically competitive market environment.
Verified Answer
Learning Objectives
- Familiarize yourself with the conditions conducive to reaching a long-run equilibrium in a monopolistically competitive market environment.
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