1. In the long run, if firms make a normal profit, then new entrants would be encouraged to move into the industry.
2. If Big Time Utilities wins a patent for a nuclear mini-power plant that enables it to become the monopoly provider of small generators, the resulting industrial structure leads to:
A) a loss in consumer surplus.
B) a gain in consumer surplus.
C) no change in consumer surplus.
D) a loss of comparative advantage.
3. Companies in the ABC industry are enjoying short-run economic profits. The number of units sold has recently been increasing. This increase is due to:
A) only existing firms expanding production.
B) only new sellers entering the market.
C) both existing companies expanding and new sellers coming into the market.
D) government entering the market.
These multiple choice questions belong to Economics. The 1st question is about firms making normal profits in the long run would motivate new entrants into entering the industry, the 2nd question is about winning a patent and becoming a monopoly and the 3rd question is about sales increasing the short run and the firms enjoying short run economic profits.
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