Question

If firms are producing at a profit-maximizing level of output where the price exceeds average total cost: O other forms will enter the market. Oeconomic profits must be positive. accounting profits must be positive. All of these are true.

Answer 1

Answer: All of these are true

Justification:

When the firms are earning profit by producing a product, there are high chances that other firms may also enter the market because of the market attractiveness. Economic profits must be positive while considering the implicit and explicit costs of making the product. Accounting profits must be positive because the total revenue generated will be higher than the total cost. However, more importance can be provided to accounting profits because economic profit considers the opportunity costs of entering a market.