28. When firms in a price-taker market are temporarily able tocharge prices that

Question

28.   When firms in a price-taker market are temporarily able tocharge prices that exceed their production costs, A.   the firms will earn long-run economicprofit. B.   additional firms will be attractedinto the market until price falls to the level of per-unitproduction cost. C.   the firms will earn short-run economicprofits that will be offset by long-run economic losses. D.   the existing firms must be colludingor rigging the market, otherwise, they would be unable to chargesuch high prices. 28.   When firms in a price-taker market are temporarily able tocharge prices that exceed their production costs, A.   the firms will earn long-run economicprofit. B.   additional firms will be attractedinto the market until price falls to the level of per-unitproduction cost. C.   the firms will earn short-run economicprofits that will be offset by long-run economic losses. D.   the existing firms must be colludingor rigging the market, otherwise, they would be unable to chargesuch high prices. 28.   When firms in a price-taker market are temporarily able tocharge prices that exceed their production costs,

Explanation / Answer

B. additional firms will be attracted into the market until pricefalls to the level of per unit production cost.

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