Why does the price level in a perfectly competitive market move toward the zero-profit point? A Because profitable firms increase short-run productivity B Because short-run losses reverse the effects of long-run gains C Because firms enter and exit the market in response to gains and losses D Because firms operate below the average cost curve
Why does the price level in a perfectly competitive market move toward the zero-profit point? A Because profitable firms increase short-run productivity B Because short-run losses reverse the effects of long-run gains C Because firms enter and exit the market in response to gains and losses D Because firms operate below the average cost curve
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: Firms In Competitive Markets
Section: Chapter Questions
Problem 1CQQ
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Why does the price level in a
-
A
Because profitable firms increase short-run productivity
-
B
Because short-run losses reverse the effects of long-run gains
-
C
Because firms enter and exit the market in response to gains and losses
-
D
Because firms operate below the average cost curve
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