Which of the following could generate economic profits for perfectly competitive firms in the short run, if they initially earn zero economic profits?

Question

Quizplus · Accepted Answer

A decrease in input prices would result in a decrease in the firm's total costs, leading to an increase in profits, even if they were initially earning zero economic profits. The other options would either decrease revenues (fall in demand) or increase costs (unit tax on output, increase in total fixed costs), leading to a decrease in profits or even losses for perfectly competitive firms in the short run.

Which of the Following Could Generate Economic Profits for Perfectly