How can a perfectly competitive firm that makes (along with its competitors) zero economic profit create positive economic profit in the short run? It can
A) raise the price of its good
B) develop a new cost-saving technology
C) advertise to promote its own brand
D) set up barriers to entry
E) lower the price to increase the quantity it can sell

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms can create positive economic profit in the short run by developing a new cost-saving technology. This reduces their costs of production, allowing them to earn profits above the normal profit level without altering the market price, as prices are determined by the market in perfect competition.

How Can a Perfectly Competitive Firm That Makes (Along with Its