In the Long Run Firms Will Expand as Long as There

question 276

Multiple Choice

In the long run firms will expand as long as there are more ________, and new firms will enter the industry as long as they earn ________.

• A) economies of scale; zero profits
• B) economies of scale; positive economic profits
• C) diseconomies of scale; zero profits
• D) diseconomies of scale; positive economic profits

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Definitions:

Total Revenue

The total income generated by a business from the sale of goods and services before any costs or expenses are deducted.

Price Decrease

refers to a reduction in the cost of a good or service, which can lead to an increase in demand due to the law of demand, assuming other factors remain constant.

Unit Elastic

A situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price.

Total Revenue

The total amount of money generated by the sale of goods or services before any costs are deducted.