Author Question: When perfectly competitive firms in an industry are earning positive economic profits, a. we would ... (Read 83 times)

Tirant22 · **on:** Jun 30, 2018

When perfectly competitive firms in an industry are earning positive economic profits,
a. we would expect entry into the industry.
b. we would expect stability in the industry, since it is in long run equilibrium.
c. we would expect exit from the industry.
d. we do not know whether there would tend to be entry, exit, or stability in the industry.

Question 2

The theory of comparative advantage is based on:
a. absolute opportunity costs.
b. relative opportunity costs.
c. total costs of production.
d. the number of units produced by a firm.
e. a comparison of marginal cost with average variable costs.