In the Long Run, Each Firm in a Competitive Industry

question 79

Multiple Choice

In the long run, each firm in a competitive industry earns

• A)zero accounting profits.
• B)zero economic profits.
• C)positive economic profits.
• D)positive, negative, or zero economic profits.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the rate of tax applied to their highest level of income.

Progressive Rate

A tax system in which the tax rate increases as the taxable income increases.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the taxpayer’s total income.

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity in a specified tax period.