MICROECONOMICS 33. In the long run_in a perfectly,competitive industry, we can e
ID: 1119285 • Letter: M
Question
MICROECONOMICS
33. In the long run_in a perfectly,competitive industry, we can expect___
a. economic profits to be earned
b. market price to rise if economic profits are earned
c. economic losses to be incurred
d.only a normal or zero economic profit level to be earned
e.market price to fall if economic losses are incurred.
34.Which of the following would NOT differentitiate the product of firm X from the product offered by firm Y?
a. exclusive sales outlets for products of firm X
b.the brand label of the product of firm X
c.technical differences in the product of firm X
d.the reputation of firm X
e. a lower price for products from firm X
Explanation / Answer
Answer.)
Q33.) d.only a normal or zero economic profit level to be earned
The existence of economic profits attracts entry, economic losses lead to the exit, and in long-run equilibrium, firms in a perfectly competitive industry will earn zero economic profit.
Q34.) e. a lower price for products from firm X
Differentiation can be anything except price. In fact, Differentiation on the basis of price indicates substitutability.
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