Answer to Question #181966 in Macroeconomics for James

Question

QUESTION 16

If a business in a perfectly competitive market is making a profit in the short run:

1. It has an incentive to expand existing factories or to build new ones.
2. It should expect to continue doing so in the long run.
3. It is guaranteed to make a profit in the long run as well.
4. It has an incentive to reduce output, causing prices to rise.
5. All of the above.

QUESTION 17

Profits are the measurement that determines:

1. Whether the firm’s products are necessities.
2. Whether a firm stays operating or not.
3. Weather for the next ten days.
4. The price of the product being sold.
5. The cost to produce the product being sold.

QUESTION 18

Individuals start businesses:

1. Only if they have to.
2. With the purpose of making profits.
3. Only in the interest of aiding society.
4. Only when it is detrimental to society.
5. Whenever the moon is full.

Answer 1

QUESTION 16

If a business in a perfectly competitive market is making a profit in the short run:

It has an incentive to expand existing factories or to build new ones.

QUESTION 17

Profits are the measurement that determines:

Whether the firm’s products are necessities.

QUESTION 18

Individuals start businesses:

With the purpose of making profits.