In a purely competitive market, zero economic profits indicate that:
A) fierce advertising is occurring in the market place.
B) the industry is operating normally and production is at its proper level.
C) firms are overproducing.
D) firms need to expand output to reduce costs.
Your answer: B was correct!
In a purely competitive market, zero economic profits indicate that firms are producing at the proper level. Zero economic profits is not bad since the firm is able to recover its production and operating costs as well as earn a fair return on the invested capital.
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发表于 2006-3-29 17:21
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