In a competitive market with identical firms,

Anonymous
timer Asked: Mar 25th, 2016

Question description

b.

free entry and exit into the market requires that firms earn zero economic profit in the long run even though they may be able to earn positive economic profit in the short run.

c.

firms cannot earn positive economic profit in either the short run or long run.

d.

an increase in demand in the short run will result in a new price above the minimum of average total cost, allowing firms to earn a positive economic profit in both the short run and the long run.


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