One Could Argue Correctly That

question 65

Multiple Choice

One could argue correctly that

• A) all firms in any industry can earn short-run but not necessarily long-run positive economic profit.
• B) all firms in any industry can earn long-run but not necessarily short-run positive economic profit.
• C) all firms in any industry can earn both short-run and long-run positive economic profit.
• D) no firm in any industry can earn long-run positive economic profit because all price changes made by any firm will be followed by all of the other firms.
• E) all firms in any industry can earn short-run positive profit if economies of scale exist.

---

Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Producer Surplus

The difference between the amount producers are willing and able to sell a good for and the actual amount received by them when the good is sold at the market price.

Comparative Advantage

The capacity of a person or collective to conduct a specific economic operation more effectively compared to another.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.