A perfectly competitive firm cannot make economic profits in the long run because:
a. it is a price taker.
b. there are no barriers to entry into the industry.
c. it faces a perfectly elastic demand curve.
d. its advertising costs will rise to eliminate any economic profits.
Question 2
Bankers supported the Federal Reserve Board's Regulation Q because:
a. it allowed them to charge lower interest rates on loans.
b. it protected them from money market volatilities.
c. it increased the demand for loanable funds in the market.
d. it allowed them to borrow at a low rate of interest and lend out at a high rate of interest.
