Chapter 13 Economics Review

9/24/2016
Micro Econ
MicroEconFlashcards|Quizlet
75 terms by Jay_Johnson9
Economic cost can best be dened as:
C. a payment that must be made to obtain

and retain the services of a resource.
A. any contractual obligation that results in

a flow of money expenditures from an
enterprise to resource suppliers.
B. any contractual obligation to labor or
material suppliers.
C. a payment that must be made to obtain
and retain the services of a resource.
D. all costs exclusive of payments to xed
factors of production.
Which of the following constitutes an
implicit cost to the Johnston Manufacturing
Company?
C. Use of savings to pay operating

expenses instead of generating interest
income.
A. Payments of wages to its oce workers.

B. Rent paid for the use of equipment
owned by the Schultz Machinery Company.
C. Use of savings to pay operating
expenses instead of generating interest
income.
D. Economic prots resulting from current
production.
https://quizlet.com/80786887/microeconflashcards/
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Which of the following is most likely to be

an implicit cost for Company X?
A. Forgone rent from the building owned

and used by Company X.
A. Forgone rent from the building owned

and used by Company X.
B. Rental payments on IBM equipment.
C. Payments for raw materials purchased
from Company Y.
D. Transportation costs paid to a nearby
trucking rm.
4. Production costs to an economist:
B. reflect opportunity costs.
A. consist only of explicit costs.

B. reflect opportunity costs.
C. never reflect monetary outlays.
D. always reflect monetary outlays.
5. What do wages paid to factory workers,
interest paid on a bank loan, forgone
interest, and the purchase of component
parts have in common?
B. All are opportunity costs.
A. None are either implicit or explicit costs.

B. All are opportunity costs.
C. All are implicit costs.
D. All are explicit costs.
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6. To the economist, total cost includes:
A. explicit and implicit costs.
A. explicit and implicit costs.

B. neither implicit nor explicit costs.
C. implicit, but not explicit, costs.
D. explicit, but not implicit, costs.
7. Implicit and explicit costs are dierent in
that:
D. the former refer to nonexpenditure costs

and the latter to monetary payments.
A. explicit costs are opportunity costs;

implicit costs are not.
B. implicit costs are opportunity costs;
explicit costs are not.
C. the latter refer to nonexpenditure costs
and the former to monetary payments.
D. the former refer to nonexpenditure costs
and the latter to monetary payments.
8. Accounting prots equal total revenue
minus:
A. total explicit costs.
A. total explicit costs.

B. total implicit costs.
C. total economic costs.
D. economic prots.
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9. An explicit cost is:
B. a money payment made for resources

not owned by the rm itself.
A. omitted when accounting prots are

calculated.
B. a money payment made for resources
not owned by the rm itself.
C. an implicit cost to the resource owner
who receives that payment.
D. always in excess of a resource's
opportunity cost.
10. Accounting prots are typically:
D. greater than economic prots because

the former do not take implicit costs into
account.
A. greater than economic prots because

the former do not take explicit costs into
account.
B. equal to economic prots because
accounting costs include all opportunity
costs.
C. smaller than economic prots because
account.
D. greater than economic prots because
account.
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11. Which of the following statements

applies to a purely competitive producer?
A. It will not advertise its product.
A. It will not advertise its product.

B. In long-run equilibrium it will earn an
economic prot.
C. Its product will have a brand name.
D. Its product is slightly dierent from those
of its competitors.
12. A purely competitive seller is:
C. a "price taker."
A. both a "price maker" and a "price taker."

B. neither a "price maker" nor a "price taker."
C. a "price taker."
D. a "price maker."
13. Which of the following is not a
characteristic of pure competition?
A. Price strategies by rms.
A. Price strategies by rms.

B. A standardized product.
C. No barriers to entry.
D. A larger number of sellers.
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14. Which of the following is not a basic

characteristic of pure competition?
A. Considerable nonprice competition.
A. Considerable nonprice competition.

B. No barriers to the entry or exit of rms.
C. A standardized or homogeneous
product.
D. A large number of buyers and sellers.
15. The demand schedule or curve
confronted by the individual, purely
competitive rm is:
B. perfectly elastic.
A. relatively elastic, that is, the elasticity

coecient is greater than unity.
B. perfectly elastic.
C. relatively inelastic, that is, the elasticity
coecient is less than unity.
D. perfectly inelastic.
16. Which of the following is characteristic
of a purely competitive seller's demand
curve?
A. Price and marginal revenue are equal at

all levels of output.
A. Price and marginal revenue are equal at

all levels of output.
B. Average revenue is less than price.
C. Its elasticity coecient is 1 at all levels of
output.
D. It is the same as the market demand
curve.
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17. In answering the question, assume a

graph in which dollars are measured on the
vertical axis and output on the horizontal
axis.
A. straight, upsloping line.
Refer to the information. For a purely

competitive rm, total revenue graphs as a:

B. straight line, parallel to the vertical axis.
C. straight line, parallel to the horizontal
axis.
D. straight, downsloping line.
axis.

axis.

competitive rm, marginal revenue graphs
as a:

B. straight line, parallel to the vertical axis.
axis.
D. straight, downsloping line.
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axis.
D. the demand and marginal revenue

curves will coincide.

competitive rm:
A. marginal revenue will graph as an

upsloping line.
B. the demand curve will lie above the
marginal revenue curve.
C. the marginal revenue curve will lie above
the demand curve.
D. the demand and marginal revenue
curves will coincide.
20. If a rm in a purely competitive industry
is confronted with an equilibrium price of
$5, its marginal revenue:
B. will also be $5.
A. may be either greater or less than $5.

B. will also be $5.
C. will be less than $5.
D. will be greater than $5.
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21. Price is constant to the individual rm

selling in a purely competitive market
because:
C. each seller supplies a negligible fraction

of total supply.
A. the rm's demand curve is downsloping.

B. of product dierentiation reinforced by
extensive advertising.
C. each seller supplies a negligible fraction
of total supply.
D. there are no good substitutes for its
product.
22. Which of the following distinguishes the
short run from the long run in pure
competition?
A. Firms can enter and exit the market in

the long run but not in the short run.
A. Firms can enter and exit the market in

B. Firms attempt to maximize prots in the
long run but not in the short run.
C. Firms use the MR = MC rule to maximize
prots in the short run but not in the long
run.
D. The quantity of labor hired can vary in
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23. The primary force encouraging the

entry of new rms into a purely competitive
industry is:
B. economic prots earned by rms already

in the industry.
A. normal prots earned by rms already in

the industry.
B. economic prots earned by rms already
in the industry.
C. government subsidies for start-up rms.
D. a desire to provide goods for the
betterment of society.
24. In a purely competitive industry:
C. there may be economic prots in the

short run but not in the long run.
A. there will be no economic prots in

either the short run or the long run.
B. economic prots may persist in the long
run if consumer demand is strong and
stable.
C. there may be economic prots in the
short run but not in the long run.
D. there may be economic prots in the
long run but not in the short run.
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25. Suppose a rm in a purely competitive

market discovers that the price of its
product is above its minimum AVC point but
everywhere below ATC. Given this, the rm:
D. should continue producing in the short

run but leave the industry in the long run if
the situation persists.
A. minimizes losses by producing at the

minimum point of its AVC curve.
B. maximizes prots by producing where
MR = ATC.
C. should close down immediately.
D. should continue producing in the short
run but leave the industry in the long run if
the situation persists.
26. Which of the following is true
concerning purely competitive industries?
C. In the short run, rms may incur

economic losses or earn economic prots,
but in the long run they earn normal prots.
A. There will be economic losses in the

long run because of cut-throat competition.
B. Economic prots will persist in the long
run if consumer demand is strong and
stable.
C. In the short run, rms may incur
economic losses or earn economic prots,
but in the long run they earn normal prots.
D. There are economic prots in the long
run but not in the short run.
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27. If a purely competitive rm is producing

at the MR = MC output level and earning an
economic prot, then:
B. new rms will enter this market.
A. the selling price for this rm is above the

market equilibrium price.
B. new rms will enter this market.
C. some existing rms in this market will
leave.
D. there must be price xing by the
industry's rms.
28. Long-run competitive equilibrium:
D. results in zero economic prots.
A. is realized only in constant-cost

industries.
B. will never change once it is realized.
C. is not economically ecient.
D. results in zero economic prots.
29. We would expect an industry to expand
if rms in that industry are:
B. earning economic prots.
A. earning normal prots.

B. earning economic prots.
C. breaking even.
D. earning accounting prots.
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30. Which of the following statements is

correct?
A. Economic prots induce rms to enter an

industry; losses encourage rms to leave.
A. Economic prots induce rms to enter an

industry; losses encourage rms to leave.
B. Economic prots induce rms to leave an
industry; prots encourage rms to leave.
C. Economic prots and losses have no
signicant impact on the growth or decline
of an industry.
D. Normal prots will cause an industry to
expand.
31. Suppose a purely competitive,
increasing-cost industry is in long-run
equilibrium. Now assume that a decrease in
consumer demand occurs. After all
resulting adjustments have been
completed, the new equilibrium price:
A. and industry output will be less than the

initial price and output.
A. and industry output will be less than the

initial price and output.
B. will be greater than the initial price, but
the new industry output will be less than
the original output.
C. will be less than the initial price, but the
new industry output will be greater than
the original output.
D. and industry output will be greater than
the initial price and output.
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32. For an imperfectly competitive rm:
C. the marginal revenue curve lies below

the demand curve because any reduction
in price applies to all units sold.
A. total revenue is a straight, upsloping line

because a rm's sales are independent of
product price.
B. the marginal revenue curve lies above
C. the marginal revenue curve lies below
D. the marginal revenue curve lies below
in price applies only to the extra unit sold.
33. When a rm is on the inelastic segment
of its demand curve, it can:
C. increase prots by increasing price.
A. increase total revenue by reducing price.

B. decrease total costs by decreasing price.
C. increase prots by increasing price.
D. increase total revenue by more than the
increase in total cost by increasing price.
34.
B. increase by C - A.
Refer to the diagram. If price is reduced

from P1 to P2, total revenue will:
A. increase by A - C.
B. increase by C - A.
C. decrease by A - C.
D. decrease by C - A.
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35.
B. marginal revenue.
Refer to the diagram. The quantitative

dierence between areas A and C for
reducing the price from P1 to P2 measures:
A. marginal cost.
B. marginal revenue.
C. monopoly price.
D. a welfare or eciency loss.
36. Answer the question on the basis of the
demand schedule shown below:
C. $2.
Refer to the data. The marginal revenue

obtained from selling the third unit of
output is:
A. $6.
B. $1.
C. $2.
D. $5.
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demand schedule shown below:
D. is greater than unity (one).
Refer to the data. At the point where 3 units

are being sold, the coecient of price
elasticity of demand:
A. cannot be estimated.
B. suggests that the market is purely
competitive.
C. is less than unity (one).
D. is greater than unity (one).
38. Monopolistic competition means:
C. many rms producing dierentiated

products.
A. a market situation where competition is

based entirely on product dierentiation
and advertising.
B. a large number of rms producing a
standardized or homogeneous product.
C. many rms producing dierentiated
products.
D. a few rms producing a standardized or
homogeneous product.
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39. Monopolistic competition is

characterized by a:
C. large number of rms and low entry

barriers.
A. few dominant rms and low entry

barriers.
B. large number of rms and substantial
entry barriers.
C. large number of rms and low entry
barriers.
D. few dominant rms and substantial entry
barriers.
40. Under monopolistic competition, entry
to the industry is:
B. more dicult than under pure

competition but not nearly as dicult as
under pure monopoly.
A. completely free of barriers.

B. more dicult than under pure
competition but not nearly as dicult as
under pure monopoly.
C. more dicult than under pure monopoly.
D. blocked.
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41. Monopolistic competition resembles

pure competition because:
D. barriers to entry are either weak or

nonexistent.
A. both industries emphasize nonprice

competition.
B. in both instances rms will operate at the
minimum point on their long-run average
total cost curves.
C. both industries entail the production of
dierentiated products.
D. barriers to entry are either weak or
nonexistent.
42. Which of the following is not a basic
characteristic of monopolistic competition?
B. Recognized mutual interdependence.
A. The use of trademarks and brand names.

B. Recognized mutual interdependence.
C. Product dierentiation.
D. A relatively large number of sellers.
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43. Nonprice competition refers to:
C. advertising, product promotion, and

changes in the real or perceived
characteristics of a product.
A. competition between products of

dierent industries, for example,
competition between aluminum and steel in
the manufacture of automobile parts.
B. price increases by a rm that are ignored
by its rivals.
C. advertising, product promotion, and
changes in the real or perceived
characteristics of a product.
D. reductions in production costs that are
not reflected in price reductions.
44. The restaurant, legal assistance, and
clothing industries are each illustrations of:
C. monopolistic competition.
A. countervailing power.
B. homogeneous oligopoly.
C. monopolistic competition.
D. pure monopoly.
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45. If the number of rms in a

monopolistically competitive industry
increases and the degree of product
dierentiation diminishes:
C. the industry would more closely

approximate pure competition.
A. the likelihood of realizing economic

prots in the long run would be enhanced.
B. individual rms would now be operating
at outputs where their average total costs
would be higher.
C. the industry would more closely
approximate pure competition.
D. the likelihood of collusive pricing would
increase.
46. Economic analysis of a monopolistically
competitive industry is more complicated
than that of pure competition because:
A. of product dierentiation and

consequent product promotion activities.
A. of product dierentiation and

consequent product promotion activities.
B. monopolistically competitive rms
cannot realize an economic prot in the
long run.
C. the number of rms in the industry is
larger.
D. monopolistically competitive producers
use strategic pricing strategies to combat
rivals.
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47. A monopolistically competitive industry

combines elements of both competition
and monopoly. The monopoly element
results from:
C. product dierentiation.
A. the likelihood of collusion.

B. high entry barriers.
C. product dierentiation.
D. mutual interdependence in decision
making.
48. A signicant dierence between a
monopolistically competitive rm and a
purely competitive rm is that the:
C. former sells similar, although not

identical, products.
A. former does not seek to maximize

prots.
B. latter recognizes that price must be
reduced to sell more output.
C. former sells similar, although not
identical, products.
D. former's demand curve is perfectly
inelastic.
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49. A monopolistically competitive industry

combines elements of both competition
and monopoly. It is correct to say that the
competitive element results from:
A. a relatively large number of rms and the

monopolistic element from product
dierentiation.
A. a relatively large number of rms and the

monopolistic element from product
dierentiation.
B. product dierentiation and the
monopolistic element from high entry
barriers.
C. a perfectly elastic demand curve and the
monopolistic element from low entry
barriers.
D. a highly inelastic demand curve and the
monopolistic element from advertising and
product promotion.
50. Monopolistically competitive and
purely competitive industries are similar in
that:
D. there are few, if any, barriers to entry.
A. both are assured of short-run economic

prots.
B. both produce dierentiated products.
C. the demand curves facing individual
rms are perfectly elastic in both industries.
D. there are few, if any, barriers to entry.
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51. The monopolistic competition model

assumes that:
C. rms will engage in nonprice

competition.
A. allocative eciency will be achieved.

B. productive eciency will be achieved.
C. rms will engage in nonprice
competition.
D. rms will realize economic prots in the
long run.
52. Use your basic knowledge and your
understanding of market structures to
answer this question. Which of the
following companies most closely
approximates a monopolistic competitor?
A. Subway Sandwiches.
A. Subway Sandwiches.
B. Pittsburgh Plate Glass.
C. Ford Motor Company.
D. Microsoft.
53. A monopolistically competitive rm has
a:
A. highly elastic demand curve.
A. highly elastic demand curve.

B. highly inelastic demand curve.
C. perfectly inelastic demand curve.
D. perfectly elastic demand curve.
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54. The monopolistically competitive

seller's demand curve will become more
elastic the:
C. larger the number of competitors.
A. more signicant the barriers to entering

the industry.
B. greater the degree of product
dierentiation.
C. larger the number of competitors.
D. smaller the number of competitors.
55. The larger the number of rms and the
smaller the degree of product
dierentiation the:
D. more elastic is the monopolistically

competitive rm's demand curve.
A. greater the divergence between the

demand and the marginal revenue curves
of the monopolistically competitive rm.
B. larger will be the monopolistically
competitive rm's xed costs.
C. less elastic is the monopolistically
D. more elastic is the monopolistically
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56. The demand curve of a monopolistically

competitive producer is:
C. more elastic than that of a pure

monopolist, but less elastic than that of a
pure competitor
A. less elastic than that of either a pure

monopolist or a pure competitor.
B. less elastic than that of a pure
monopolist, but more elastic than that of a
pure competitor.
C. more elastic than that of a pure
monopolist, but less elastic than that of a
pure competitor.
D. more elastic than that of either a pure
monopolist or a pure competitor.
57. A monopolistically competitive rm's
marginal revenue curve:
C. is downsloping and lies below the

demand curve.
A. is downsloping and coincides with the

demand curve.
B. coincides with the demand curve and is
parallel to the horizontal axis.
C. is downsloping and lies below the
demand curve.
D. does not exist because the rm is a
"price maker."
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following demand and cost data for a
specic rm:
B. 8 units.
Demand data Cost Data

1 2 3 Total
Price Price Quantity Output Cost
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86
Refer to the data. If columns (1) and (3) of
the demand data shown are this rm's
demand schedule, the prot-maximizing
level of output will be:
A. 12 units.
B. 8 units.
C. 10 units.
D. 9 units.
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specic rm:
A. $9.

1 2 3 Total
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86

demand schedule, the prot-maximizing
price will be:
A. $9.
B. $7.
C. $11.
D. $6.
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specic rm:
D. $8.

1 2 3 Total
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86
demand schedule, economic prot will be:
A. $10.
B. $19.
C. $6.
D. $8.
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specic rm:
D. decline to zero.

1 2 3 Total
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86
Refer to the data. Suppose that entry into

the industry changes this rm's demand
schedule from columns (1) and (3) shown to
columns (2) and (3). Economic prot will:
A. fall by $10.
B. fall to $6.
C. increase by $10.
D. decline to zero.
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specic rm:
1 2 3 Total
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86
D. monopolistically competitive.
Refer to the data. Suppose that entry into

this industry changes this rm's demand
schedule from columns (1) and (3) shown to
columns (2) and (3). We can conclude that
this industry is:
A. a pure monopoly.
B. purely competitive.
C. a constant cost industry.
D. monopolistically competitive.
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specic rm:
A. price will equal average total cost.

1 2 3 Total
$11.00 10.00 6 6 $61
$9.99 8.85 7 7 62
9.00 8.00 8 8 64
8.00 7.00 9 9 67
7.10 6.10 10 10 72
6.00 5.00 11 11 79
5.15 4.15 12 12 86
Refer to the data. With the demand

schedule shown by columns (2) and (3), in
long-run equilibrium:
A. price will equal average total cost.

B. total cost will exceed total revenue.
C. marginal cost will exceed price.
D. price will equal marginal revenue.
64. An important similarity between a
purely competitive rm is that:
B. economic prot tends toward zero for

both.
A. both face perfectly elastic demand

schedules.
B. economic prot tends toward zero for
both.
C. both realize productive eciency.
D. both realize allocative eciency.
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65. An important similarity between a

pure monopolist is that both:
C. face demand curves that are less than

perfectly elastic.
A. realize an economic prot in the long

run.
B. achieve allocative eciency.
C. face demand curves that are less than
perfectly elastic.
D. achieve productive eciency.
66. The less elastic a monopolistic
competitor's long-run demand curve, the:
B. higher its price relative to that of a pure

competitor having the same cost curves.
A. less its excess capacity.

B. higher its price relative to that of a pure
competitor having the same cost curves.
C. higher its long-run prots.
D. lower its average total cost at its
equilibrium level of output.
67.
C. realizing a normal prot in the long run.
Refer to the diagram for a monopolistically

competitive producer. The rm is:
A. minimizing losses in the long run.

B. minimizing losses in the short run.
C. realizing a normal prot in the long run.
D. about to leave the industry.
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68.
C. excess capacity of DE.

competitive producer. This rm is
experiencing:
A. a shortage of production capacity.

B. excess capacity of CD.
C. excess capacity of DE.
D. diseconomies of scale.
69.
B. incur a loss.

competitive producer. If this rm were to
realize productive eciency, it would:
A. also realize an economic prot.

B. incur a loss.
C. also achieve allocative eciency.
D. have to produce a smaller output.
70. In the long run a monopolistically
competitive rm:
B. produces where P = ATC.
A. earns an economic prot.

B. produces where P = ATC.
C. produces where MR exceeds MC.
D. achieves allocative eciency.
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71. Monopolistically competitive industries

are inecient because:
C. they are overpopulated with rms whose

plants are underutilized.
A. they realize diseconomies of scale.

B. advertising costs retard technological
advance and product development.
C. they are overpopulated with rms whose
plants are underutilized.
D. monopolistically competitive sellers
engage in misleading advertising.
72. The economic ineciencies of
monopolistic competition may be oset by
the fact that:
D. consumers have increased product

variety.
A. advertising expenditures shift the

average cost curve upward.
B. available capacity is fully utilized.
C. resources are optimally allocated to the
production of the product.
D. consumers have increased product
variety.
73. A signicant benet of monopolistic
competition compared with pure
competition is:
C. greater product variety.
A. less likelihood of X-ineciency.

B. improved resource allocation.
C. greater product variety.
D. stronger incentives to achieve
economies of scale.
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74. Product variety is likely to be greater in:
A. monopolistic competition than in pure

competition.
A. monopolistic competition than in pure

competition.
B. pure competition than in monopolistic
competition.
C. homogeneous oligopoly than in
monopolistic competition.
D. homogeneous oligopoly than in
dierentiated oligopoly.
75. Which of the following is correct?
D. The greater the degree of product

variation, the greater is the excess capacity
problem.
A. The excess capacity problem diminishes

as the monopolistically competitive rm's
demand curve becomes less elastic.
B. The excess capacity problem means that
monopolistically competitive rms typically
produce at some point on the rising
segment of their average total cost curve.
C. The greater the degree of product
variation, the lesser is the excess capacity
problem.
D. The greater the degree of product
variation, the greater is the excess capacity
problem.
35/35

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9/24/2016

Economic cost can best be dened as:

C. a payment that must be made to obtain

A. any contractual obligation that results in

C. Use of savings to pay operating

A. Payments of wages to its oce workers.

Which of the following is most likely to be

A. Forgone rent from the building owned

A. Forgone rent from the building owned

B. reflect opportunity costs.

A. consist only of explicit costs.

B. All are opportunity costs.

A. None are either implicit or explicit costs.

6. To the economist, total cost includes:

A. explicit and implicit costs.

A. explicit and implicit costs.

D. the former refer to nonexpenditure costs

A. explicit costs are opportunity costs;

A. total explicit costs.

A. total explicit costs.

9. An explicit cost is:

B. a money payment made for resources

A. omitted when accounting prots are

D. greater than economic prots because

A. greater than economic prots because

11. Which of the following statements

A. It will not advertise its product.

A. It will not advertise its product.

A. both a "price maker" and a "price taker."

A. Price strategies by rms.

A. Price strategies by rms.

14. Which of the following is not a basic

A. Considerable nonprice competition.

A. Considerable nonprice competition.

A. relatively elastic, that is, the elasticity

A. Price and marginal revenue are equal at

A. Price and marginal revenue are equal at

17. In answering the question, assume a

A. straight, upsloping line.

Refer to the information. For a purely

A. straight, upsloping line.

C. straight line, parallel to the horizontal

Refer to the information. For a purely

A. straight, upsloping line.

19. In answering the question, assume a

D. the demand and marginal revenue

Refer to the information. For a purely

A. marginal revenue will graph as an

B. will also be $5.

A. may be either greater or less than $5.

21. Price is constant to the individual rm

C. each seller supplies a negligible fraction

A. the rm's demand curve is downsloping.

A. Firms can enter and exit the market in

A. Firms can enter and exit the market in

23. The primary force encouraging the

B. economic prots earned by rms already

A. normal prots earned by rms already in

C. there may be economic prots in the

A. there will be no economic prots in

25. Suppose a rm in a purely competitive

D. should continue producing in the short

A. minimizes losses by producing at the

C. In the short run, rms may incur