The Representative Firm in a Purely Competitive Industry

question 65

Multiple Choice

The representative firm in a purely competitive industry

• A)will always earn a profit in the short run.
• B)may earn either an economic profit or a loss in the long run.
• C)will always earn an economic profit in the long run.
• D)will earn zero economic profit in the long run.

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Definitions:

Intangible Assets

Non-physical assets owned by a business, such as patents, trademarks, goodwill, and copyrights, that have economic value and can provide future benefits.

Amortized

The gradual reduction of a debt or the spreading of capital expenses over a period of time.

Research and Development Costs

Expenses associated with the research and development of a company's goods or services, aiming to improve and innovate.