Question

There is a tendency for economic profit in all competitive industries to go to zero. Question...

There is a tendency for economic profit in all competitive industries to go to zero.

Question 25 options:

a)

True

b)

False

If the market price in a competitive market is $10, and a firm's marginal cost (MC) is given by MC = 0.50Q, where Q is units of output, this firm should produce 20 units of output to maximize profit.

Question 14 options:

a)

True

b)

False

As entrepreneurs move resources into and out of industries seeking higher profit rates, the total value of production gets maximized.

Question 10 options:

a)

True

b)

False
0 0
Add a comment Improve this question Transcribed image text
Answer #1

a) True, of the market is competitive and there is free entry and exit in the market then the economic profit will go to zero.

b) True, if they are producing 20 unit then the marginal cost and the price in the market will be equal.

c) True, in the long run the industry will be producing at the point where the ATC is the lowest.

Add a comment
Know the answer?
Add Answer to:
There is a tendency for economic profit in all competitive industries to go to zero. Question...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • If the market price in a competitive market is $10, and a firm's marginal cost (MC)...

    If the market price in a competitive market is $10, and a firm's marginal cost (MC) is given by MC = 0.50Q, where Q is units of output, this firm should produce 20 units of output to maximize profit. False True

  • Consider the following cost curve for a firm in a competitive industry where the market price...

    Consider the following cost curve for a firm in a competitive industry where the market price equals ​$200 C​ = 1/3q3+4q+750 What is the​ firm's marginal cost​ (MC)? MC​ = At what level of output does the firm maximize profits​ (minimize losses)? Profit is maximized at __units of output.  ​(Round your answer to two decimal​ places.) What is the​ firm's profit maximizing​ price? The​ profit-maximizing price is $___ In the​ short-run, this firm should produce ____ .

  • QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic...

    QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic profits. negative economic profits. Positive, zero, or negative economic profits. QUESTION 8 Which of the following statements best describes firms under monopolistic competition? Profits will be positive in the long run. Price always equals average variable cost. In the long run, positive economic profit will be eliminated. Marginal revenue equals minimum average total cost in the short run. QUESTION 9 Which of the following...

  • A limitation of the perfectly competitive market structure is that potential new entrants generally face barriers...

    A limitation of the perfectly competitive market structure is that potential new entrants generally face barriers to market entry. True False In a perfectly competitive scenario, determine(s) the market price. a dominant producer O market supply and demand individual producers In a perfectly competitive scenario, a firm's marginal revenue is equal to price, so the profit-maximizing quantity is where P = MC. True O False If, in a perfectly competitive market, P = (a firm's) ATC, then the firm: earns...

  • Question 7 Not yet anwed Points out of 1.00 P Flag question If a perfectly competitive...

    Question 7 Not yet anwed Points out of 1.00 P Flag question If a perfectly competitive firm is producing 2.500 units and, at the 2,500th unit, the difference between marginal revenue and marginal cost (MR-MC) POsitive, which of the following is true? Select one: A. The firm shouid increase production to maximize profit B. The 2,500th unit costs more to produce than the firm earns in revenue O C. The firm should decrease production to maximize proft D. The inm...

  • QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not...

    QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not likely earn an economic profit in the long run. shut down in the short run if price is less than average variable cost. all of the above. QUESTION 6 A monopolistic competitive firm is inefficient because the firm: earns positive economic profit in the long run. is producing at an output corresponding to the condition that marginal cost equals price. is not maximizing its...

  • are making an economic Today, firms in a perfectly competitive market run, firms will profit. In...

    are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...

  • a firm in perfectly competitive market sells all its products Q at constant price p (1)A...

    a firm in perfectly competitive market sells all its products Q at constant price p (1)A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 +690 - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that...

  • Can you label each one please . (1)A firm in a perfectly competitive market sells all...

    Can you label each one please . (1)A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) 128+ 690-14Q + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this level of output. (b)Derive the marginal...

  • To maximize profit, a price taker will expand its output as long as the sale of...

    To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT