The analysis of international trade suggests that trading companies earn higher than normal profits in:
A) the long run but not in the short run.
B) the short run but not in the long run.
C) both the short run and the long run.
D) neither the short run nor the long run.

Question

Quizplus · Accepted Answer

In the short run, trading companies can earn higher than normal profits due to factors like market inefficiencies, lack of competition, or temporary advantages. However, in the long run, these profits tend to normalize as competition increases and market conditions stabilize.

The Analysis of International Trade Suggests That Trading Companies Earn