If We Observe Firms Earning Zero Economic Profits in the Short

question 206

Multiple Choice

If we observe firms earning zero economic profits in the short run, we know that

• A) the industry must be perfectly competitive.
• B) the industry must be either perfectly competitive or monopolistically competitive.
• C) there must not be any barriers to entry.
• D) any market structure is possible since firms under any market structure can earn zero profits at some time.

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