Author Question: In a competitive industry buffeted by demand supply shocks, prices increase and decrease, but ... (Read 46 times)

crazycityslicker · **on:** Jul 1, 2018

In a competitive industry buffeted by demand supply shocks, prices increase and decrease, but economic profits tend to revert to zero. Hence, profits are exhibiting
a. Above-average return
b. Positive earnings
c. Mean reversion
d. None of the above

Question 2

Companies that reduce their margins on export products in the face of appreciation of their home currency may be motivated by a desire to
a. sacrifice market share abroad but build market share at home
b. increase production volume to realize learning curve advantages
c. sell foreign plants and equipment to lower their debt
d. reduce the costs of transportation
e. all of the above