In a Perfectly Competitive Market, Positive Economic Profits Act to

question 336

Multiple Choice

In a perfectly competitive market, positive economic profits act to

• A) attract new entrants into the industry.
• B) drive potential competitors away from the industry.
• C) prevent reinvestment on the part of firms within the industry.
• D) signal resource owners elsewhere not to invest their capital in this industry.

Explain the factors contributing to increases in output per worker over the past decades.

Analyze the equilibrium point in labor hiring from a profit-maximization perspective.

Interpret graphs showing the relationship between labor hired and output produced, including understanding marginal product of labor.

Calculate the marginal profit given the costs and revenues associated with labor and production.