5. A profit-maximizing firm in a competitive market will earn zero accounting profits in the long...

5. A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run. a. True b. False

6.In the long run, when price is greater than average total cost, some firms in a competitive market will choose to enter the market. a. True b. False

7. In making a short-run profit-maximizing production decision, the firm must consider both fixed and variable cost. a. True b. False

8. A firm operating in a perfectly competitive market may earn positive, negative, or zero economic profit in the long run. a. True b. False

9. A firm operating in a perfectly competitive market earns zero economic profit in the long run but remains in business because the firm’s revenues cover the business owners’ opportunity costs. a. True b. False

10. In the long run, a competitive market with 1,000 identical firms will experience an equilibrium price equal to the minimum of each firm's average total cost. a. True b. False

11. For firms operating in a perfectly competitive market, price must always be greater than marginal revenue. a. True b. False

Expert Solution

Rahul Sunny answered 1 year ago

“Long-term profit maximizing situations of firms competing in perfectly competitive markets are equal to zero profits.”...

“Long-term profit maximizing situations of firms competing in perfectly competitive markets are equal to zero profits.” Please write/analyze/discuss the aforesaid statement.

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain...

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain why this is true using intuition and graphs.

When a profit-maximizing firm in a monopolistic competitive market is in long-run equilibrium, marginal cost is...

When a profit-maximizing firm in a monopolistic competitive market is in long-run equilibrium, marginal cost is rising since an increase in production would increase average total cost. true or false The product-variety externality associated with monopolistic competition arises because in markets that are monopolistic competitive markets, firms try to differentiate their products. true or false If the monopolistic competitive firm is currently producing output at a level where the marginal cost curve intersects the demand curve, then it is producing...

why do competitive firms earn zero economic profit in the long run

In long-run equilibrium for both a competitive market and monopolistic competition accounting profit is zero. price...

In long-run equilibrium for both a competitive market and monopolistic competition accounting profit is zero. price equals marginal revenue. long-run average cost is minimized. economic profit is zero.* productive efficiency is achieved.

10. A profit maximizing firm in a competitive market produces chairs. The firm, which is a...

10. A profit maximizing firm in a competitive market produces chairs. The firm, which is a price-taker, faces a price of $35 for its product. Its average variable cost is $24 and its average fixed cost is $9 at the quantity where marginal cost equals marginal revenue. In the short run, the firm A. should raise the price of its product. B. should lower the price of its product. C. will experience losses but will continue to produce chairs. D....

Explain why this statement is false: Competitive firms always earn zero profits in a long run...

Explain why this statement is false: Competitive firms always earn zero profits in a long run equilibrium because their marginal cost is equal to their marginal revenue at the optimal level of production.

Explain why the following statement is false: Competitive firms always earn zero profits in a long...

Explain why the following statement is false: Competitive firms always earn zero profits in a long run equilibrium because their marginal cost is equal to their marginal revenue at the optimal level of production.

6) In the long run the profits for a perfectly competitive firm is theoretically zero (select)...

6) In the long run the profits for a perfectly competitive firm is theoretically zero (select) [accounting, economic] profit(s) because of competition 7) For the P.C. firm in the long run Average Revenue is equal to the: (3 answers!) a) the price b) the economic cost c) the marginal cost d) the explicit cost e) the accounting cost f) the explicit-implicit cost g) the implicit price 8) Karen runs a print shop that makes posters for large companies. It is...

A profit-maximizing firm in a competitive market is able to sell its product for $9. At...

A profit-maximizing firm in a competitive market is able to sell its product for $9. At its current level of output, the firm's average total cost is $10. The firm's marginal cost is the same as its marginal revenue at its current output level of 20 units. The firm experiences a Select one: a. loss of more than $20. b. profit of more than $20. c. profit of exactly $20. d. loss of exactly $20.

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