Question

When competitive firms are earning short-run economic profits, all of the following happens, except: options: a. supply increases. b. market prices fall. c. firms are attracted to the industry by the profits. d. the number of firms in the industry will continue to grow until limits are imposed.

Name: when competitive firms are earning short run economic profits all of the following happens except options asupply increases bmarket prices fall cfirms are attracted to the industry by the pr 85856
Uploaded: 2022-08-10T21:34:23-08:00
Duration: 3 min 27 s
Channel: Andrew Davis
Description: when competitive firms are earning short run economic profits all of the following happens except options asupply increases bmarket prices fall cfirms are attracted to the industry by the pr 85856

          When competitive firms are earning short-run economic profits, all of the following happens, except: options: a. supply increases. b. market prices fall. c. firms are attracted to the industry by the profits. d. the number of firms in the industry will continue to grow until limits are imposed.

Added by Damon B.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Andrew Davis

08/10/2022

Step 1

Step 1: In a competitive market, when firms are earning short-run economic profits, it indicates that the price is greater than costs, leading to an increase in supply as more firms are attracted to enter the industry. Show more…

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When competitive firms are earning short-run economic profits, all of the following happens, except: options: a. supply increases. b. market prices fall. c. firms are attracted to the industry by the profits. d. the number of firms in the industry will continue to grow until limits are imposed.