If Firms in a Competitive Market Are Making Zero Economic

question 75

Multiple Choice

If firms in a competitive market are making zero economic profits,the long-run market supply curve

• A) is above the point where the short-run market supply curve and the demand curve intersect.
• B) is below the point where the short-run market supply curve and the demand curve intersect.
• C) and the short-run market supply curve and the demand curve all intersect at the same point.
• D) shifts upward.
• E) shifts downward.

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Definitions:

Negatively Correlated

Refers to two variables which move in opposite directions; when one variable increases, the other decreases, and vice versa.

Variables

Elements, features, or factors that are likely to vary or change and can be measured, controlled, or manipulated in experiments or models.

Opposite Directions

Refers to two lines or paths that diverge from each other, heading in completely different trajectories.

Positive Correlation

A relationship between two variables where if one variable increases, the other one also increases or if one decreases, the other also decreases.