A firm earning a zero economic profit in the long run has earned a competitive return or normal rate of return on their investment. What do they mean by "competitive" or "normal rate" of return in this context? A. The firm is making more than the rate of return of a comparable firm in the industry. B. The firm's return is at least as larger as the returns earned by other firms. C. The firm's return is at least as large as could be earned in another investment. D. The firm's return is negative, which initiates stronger competition among firms in the market. E. The firm's return could only be earned under perfect competition and would be smaller under imperfect competition.

A firm earning a zero economic profit in the long run has earned a competitive return or normal rate of return on their investment. What do they mean by "competitive" or "normal rate" of return in this context? A. The firm is making more than the rate of return of a comparable firm in the industry. B. The firm's return is at least as larger as the returns earned by other firms. C. The firm's return is at least as large as could be earned in another investment. D. The firm's return is negative, which initiates stronger competition among firms in the market. E. The firm's return could only be earned under perfect competition and would be smaller under imperfect competition.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 7.5IP

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