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At Zero Economic Profits, a Competitive Firm

Question 123

Multiple Choice

At zero economic profits, a competitive firm:


A) has an incentive to leave the industry to make higher profit elsewhere.
B) is making a normal profit; its revenues are just sufficient to cover all costs of production, including opportunity costs.
C) is unable to pay its opportunity costs of production but will remain in business to minimize losses.
D) will benefit, in the form of higher profits, by raising its prices above average cost.

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