If a Competitive Firm Is in Short-Run Equilibrium,then

question 51

Multiple Choice

If a competitive firm is in short-run equilibrium,then

• A) economic profits equal zero.
• B) economic profits will be positive.
• C) economic profits will be negative.
• D) All of the above are possible in the short run.

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Definitions:

Monopolistic Competition

This is a market structure in which many companies sell products that are similar but not identical, allowing for competition on aspects other than just price.

Marginal Revenue

Revenue gained by selling an additional unit, illustrating the increase in total revenue due to one more unit of output sold.

Innovation

The process of creating new products, services, or methods that improve efficiency or effectiveness.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the overall profitability of a business venture.