In Long-Run Equilibrium,a Competitive Firm Can Earn Zero Profit Only

question 3

Multiple Choice

In long-run equilibrium,a competitive firm can earn zero profit only if its technology exhibits

• A) increasing returns to scale.
• B) decreasing returns to scale.
• C) constant returns to scale.
• D) regressive returns to scale.

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Definitions:

Disposable Income

Income available for spending and saving after income taxes have been accounted for.

C + I

An economic formula representing consumer spending (C) plus investment spending (I), components of a country's GDP calculation.

Disposable Income

Households' financial resources for expenditure and savings following income tax deductions.

Savings

Money set aside for future use rather than spent immediately.