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Question
If we observe firms earning zero economic profits in the short run, we know that
A) the industry must be perfectly competitive.
B) the industry must be either perfectly competitive or monopolistically competitive.
C) there must not be any barriers to entry.
D) any market structure is possible since firms under any market structure can earn zero profits at some time.
Answer
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Related questions
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Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expectA) the quantity demanded is Q 2.B) a surplus will occur.C) price to decline until an equilibrium is achieved at P0.D) consumers to bid against each other for goods and force the price even higher.
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