Question 1

If identical firms that remain in a competitive market over the long run make zero economic profit, why do these firms choose to remain in the market?

Accepted Answer

The answer of If identical firms that remain in a...

Question 2

At its current level of production a profit-maximizing firm in a competitive market receives $12.50 for each unit it produces and faces an average total cost of $10. At the market price of $12.50 per unit, the firm's marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. What is the firm's current profit? What is likely to occur in this market and why?

Accepted Answer

The answer of At its current level of production a...

Question 3

Give two reasons why the long-run industry supply curve may slope upward. Use an example to demonstrate your reasons.

Accepted Answer

The answer of Give two reasons why the long-run industry...

Quiz 14: Firms in Competitive Markets

If identical firms that remain in a competitive market over the long run make zero economic profit, why do these firms choose to remain in the market?

Give two reasons why the long-run industry supply curve may slope upward. Use an example to demonstrate your reasons.