Types of Profit
AP Microeconomics · Flashcards
AP MICROECONOMICS · FLASHCARDS
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QUESTION
What is the implication of zero economic profit for resource allocation?
QUESTION
State the condition for a firm to remain in business in the long run.
QUESTION
How does positive economic profit affect industry supply?
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ANSWER
Increases industry supply. New entrants increase production as they seek above-normal returns.
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