28. When firms in a price-taker market are temporarily able tocharge prices that
ID: 1230444 • Letter: 2
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.