In the above figure, the left hand side graph represents a perfectly competitive industry and the graph represents a perfectly competitive fırm. If the market price is $5, O the firms in the industry are making profit exactly equal to the normal rate of return. O the firms in the industry are making profit below a normal rate of return. O the firms in the industry are making profit above a normal rate of return. the firms in the industry are making zero economic profits, so they should shut down.

In the above figure, the left hand side graph represents a perfectly competitive industry and the graph represents a perfectly competitive fırm. If the market price is $5, O the firms in the industry are making profit exactly equal to the normal rate of return. O the firms in the industry are making profit below a normal rate of return. O the firms in the industry are making profit above a normal rate of return. the firms in the industry are making zero economic profits, so they should shut down.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 38CTQ: In the argument for why perfect competition is allocatively efficient, the price that people are...

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