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True/False
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- Under perfect competition, firms profit in the long run will be:- (1) normal profit (2) abnormal profit (3) normal losses. SeExplain why a firm carries on production in short run even if it makes negative profit. Use well labeled diagrams to support your explanation.T or F Competitive firms' profit eventually erodes close to zero. Why?
- In the long run, firms in a competitive marketA.earn positive accounting profit, but zero economic profit.B.earn zero accounting profit and zero economic profit.C.shut down because their accounting profit goes to zero.D.earn negative accounting profit, but positive economic profit.TRUE OR FALSE If a perfectly competitive firm shuts down in the short run, its total cost equals zero.True/ False In real life perfect competition market does not exist.