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When an economist says a form is earning zero economic profit, this implies that the firm will likely have to declare bankruptcy in the near future unless market conditions change
When an economist says a form is earning zero economic profit, this implies that the firm will likely have to declare bankruptcy in the near future unless market conditions change. True False
A variable cost is an expense incurred by a firm that rises as output is increased, but falls as output is decreased. True O False
The exit of firms from a competitive price-searcher market generally increases the the demand curves for firms who remain in that market and sell their products. True False
Entry and exit of forms do not drive economic profits to zero in the long run in competitive price-searcher markets. True False
Marginal utility is the change in total cost that is required to produce an additional unit of output. True False
Expert Solution
The answer with explanation of the First question asked above is : (False) because When an economist says that a firm is earning zero economic profit this implies that the firm is earning as high a rate of return now as could be earned in other industries.
The answer with explanation of the Second question asked above is : (True) because A variable cost is an expense incurred by a firm that rises as output increased but falls as output decreased.
The answer with explanation of the Third question asked above is : (True) because when a firm exit from competitive price-searcher market then their is a less competition which leads to increase in demand curve who remains in the market and sells their product because when competition will be less the demand and sale of the product will be high .
The answer with explanation of the Fourth Question asked above is : (False) because Entry and Exit of firm Does drive economic profit to zero in the long run in competative price-searcher.
The answer with explanation of the Fifth question asked above is : (False) because Marginal Utility is the change in Total Utility that is required to produce an additional unit of output.
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