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When the firms in the industry are just able to cover their

“When the firms in the industry are just able to cover their cost of production, economic profit is zero. Therefore, if demand falls, causing prices to go down even a little bit, all of the firms in the industry will be driven out of business.” True or false? Explain.

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Solution Preview :

Prepared by a verified Expert

Microeconomics: When the firms in the industry are just able to cover their

Reference No:- TGS0655106

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : If a firm maximizes profit it must minimize the cost of

Q : What are implicit costs do implicit costs contribute to the

Q : Farmers are often heard to complain about the high costs of

Q : In a price-taker market if a business operator produces

Q : When the firms in the industry are just able to cover their

Q : Why does the short-run market supply curve for a product

Q : Will firms in a price-taker market be able to earn profits

Q : What determines the variety of styles designs and sizes of

Q : Barriers to entry are crucial to the existence of long-run

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Solution Preview :

Prepared by a verified Expert

Microeconomics: When the firms in the industry are just able to cover their

Reference No:- TGS0655106

Recent Questions Asked Microeconomics

Q : If a firm maximizes profit it must minimize the cost of

Q : What are implicit costs do implicit costs contribute to the

Q : Farmers are often heard to complain about the high costs of

Q : In a price-taker market if a business operator produces

Q : When the firms in the industry are just able to cover their

Q : Why does the short-run market supply curve for a product

Q : Will firms in a price-taker market be able to earn profits

Q : What determines the variety of styles designs and sizes of

Q : Barriers to entry are crucial to the existence of long-run

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