In a Competitive Market with Identical Firms

question 197

Multiple Choice

In a competitive market with identical firms,

• A)an increase in demand in the short run will result in a new price above the minimum of average total cost, allowing firms to earn a positive economic profit in both the short run and the long run.
• B)firms cannot earn positive economic profit in either the short run or long run.
• C)firms can earn positive economic profit in the long run if the long-run market supply curve is upward sloping.
• D)free entry and exit into the market requires that firms earn zero economic profit in the long run even though they may be able to earn positive economic profit in the short run.

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Definitions:

Voice-Activated Software

A type of software that allows the user to give commands and control the device through voice instructions.

Marginal Costs

The additional cost incurred from the production of one more unit of a product or service.

Potential Customers

Potential customers are individuals or entities that have not yet purchased but have shown interest or fit the profile of a company's target market.

Expected Profit

The projected financial gain a company anticipates earning from its operations or investments, based on various assumptions and calculations.