In a Perfectly Competitive, Increasing-Cost Industry in the Long Run

question 31

Multiple Choice

In a perfectly competitive, increasing-cost industry in the long run, economic profit for the industry __________ and economic rent __________.

• A)can be positive; can be positive
• B)can be positive; equals zero
• C)equals zero; can be positive
• D)equals zero; equals zero

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Definitions:

Perfectly Inelastic

Perfectly inelastic describes a market situation where the demand for a product does not change in response to a change in price.

Upsloping

Characteristic of a curve or line that rises as it moves to the right, often used in economics to describe certain supply curves or cost functions.

Incentive Function

The role of incentives in influencing the behavior and decisions of individuals or organizations.

Competitive Markets

Markets characterized by a large number of buyers and sellers, where no single entity controls the market prices.