When Free Entry Is One of the Attributes of a Market

question 95

Multiple Choice

When free entry is one of the attributes of a market structure, economic profits are:

• A)generally driven to zero in the long run
• B)generally negative for all firms operating in the short run.
• C)generally zero in the short run.
• D)generally positive in the long run.
• E)generally negative in the long run.

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Definitions:

Average Fixed Cost

The cost that a company incurs for fixed resources divided by the quantity of output produced.

Diminishing Marginal Returns

A principle in economics where each additional unit of input results in a smaller increase in output after a certain point.

Study Time

The period dedicated by an individual or group towards learning or academic activities.

Comprehensive Exam

A detailed and extensive exam typically covering multiple subjects or the entirety of a specific subject, often used as a qualification or assessment in higher education.