If firms in a competitive market are incurring economic losses, we would expect

Question

If firms in a competitive market are incurring economic losses, we would expect firms to ________ the market, causing the ________ curve to shift to the ________.

If the short-run market supply curve and the demand curve intersect above the long-run market supply curve, firms will experience ________ economic profits, meaning the price is ________ the minimum point on the average total cost curve.

positive; below

An example of an explicit cost is

the amount of money one could receive for renting a company truck to another business.

Rent seeking

Explanation / Answer

1. (e) Leave; Supply; Left

2. (d) Positive; above

3. (a) a payment on a loan for a computer.

An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, which are those where no actual payment is made.

4. (a) is not a type of competition.

Rent-seeking is an individual's or entity's use of company, organizational or individual resources to obtain economic gain without reciprocating any benefits to society through wealth creation.

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