Firms in every market structure
A) make long-run economic profits.
B) are in competition with many other firms.
C) leave the market as soon as they experience loss of profits.
D) will attempt to maximize profits.
E) face a horizontal demand curve.

Question

Quizplus · Accepted Answer

Regardless of market structure, firms will always attempt to maximize profits. Long-run economic profits are only possible in certain market structures (such as monopolies and oligopolies), but not in others (such as perfect competition). Firms may leave the market if they experience persistent losses, but this is not always the case. The demand curve may be horizontal in certain market structures (such as perfect competition), but not in others.

Firms in Every Market Structure