Which of the Following Is True of Normal Profits

question 96

Multiple Choice

Which of the following is true of normal profits?

• A)They are necessary to keep a firm in the industry in the long run.
• B)They are zero under pure competition in the long run.
• C)They are excluded from a firm's costs of production.
• D)They are what attract other firms to enter an industry.

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Definitions:

Federal Government

The national government of a federated state, which holds the authority to govern at a level above individual states or provinces.

Opportunity Cost

The expense associated with missing out on the second-best choice while deciding among multiple possibilities.

Efficient Markets

A concept that asserts that financial markets are "informationally efficient," meaning that prices of securities reflect all available information at any given time.