If a purely competitive firm is facing a situation where the price of its product is lower than the average cost, then all of the following apply, except
A) the firm is suffering losses, and if things are not expected to improve, the firm will leave the industry.
B) the firm may be earning some accounting profits, but less than what it could earn elsewhere.
C) other firms will want to enter the industry because of the positive economic profits.
D) the firm may earn economic profits in the long run if it expands its plant in order to exploit economies of scale.
Correct Answer:
Verified
Q82: The long-run supply curve under pure competition
Q83: Which of the following statements about pure
Q84: The long-run supply curve under pure competition
Q85: In pure competition, if the market price
Q86: All of the following statements apply to
Q88: Assume the market for ball bearings is
Q89: If firms are losing money in a
Q90: Which of the following is not an
Q91: Which of the following is not a
Q92: Which of the following is true of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents