A Perfectly Competitive Firm in the Long Run Earns

question 76

Multiple Choice

A perfectly competitive firm in the long run earns:

• A) positive economic profits but zero normal profits.
• B) positive normal profits but zero economic profits.
• C) positive economic profits and positive normal profits.
• D) zero economic profits and zero normal profits.

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Definitions:

Income Statement

A financial report that gives a summary of a company's revenues, expenses, and profits/losses over a specific period, highlighting operational performance.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial position.

Rental Income

Rental income refers to the revenue received from leasing property or other assets to tenants.

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period of time.