Question
Viridi is a price-taking firm in a perfectly competitive market. It is currently enjoying substantial positive economic profits in the short run. Assume that Viridi
Viridi is a price-taking firm in a perfectly competitive market. It is currently enjoying substantial positive economic profits in the short run. Assume that Viridi knows it has reached maximum efficient scale. What will happen in the long run? (2 points)
| Viridi will leave the market. | |
| Other firms will enter and drive the price up, eliminating Viridi's profits. | |
| Viridi will produce a higher output to increase its profit even more. | |
| Viridi will decrease its price to capture a large share of the market for its product. | |
| Other firms will enter and drive the price down, eliminating Viridi's profits. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
