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Profit and supply

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Question 1

If the long run market supply is perfectly elastic a fall in demand would cause the final equilibrium to be at:
a) The same price but at lower output
b) A lower price and a lower output
c) A lower price but at the same output
d) The same price and the same output

Question 2

True or False
A perfectly competitive firm in the long run earns zero economic profits and zero normal profits.

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Solution Summary

This solution helps with a problem involving profit and supply.

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