12) Assume that a perfectly competitive firm owns or rents a higher-quality resource that results in lower average total costs and higher economic…

12) Assume that a perfectly competitive firm owns or rents a higher-quality resource that results in lower average total costs and higher economic profits in the short run. What will happen in the long-run?
The price of the higher-quality resource will be bid upward resulting in economic rents and equalizing costs across firms.
New firms will enter and compete any excess profits away.
None of the other answers is correct.
The government will tax away any excess profits.
The firm with the higher-quality resource will earn positive economic profits in the long run.
13) Which of the following are characteristics of long-run equilibrium
No firm has an incentive to change its level of output.
No firm has an incentive to change its plant size.
Economic profit is zero
All of the above
14) Which of the following statements is consistent with the textbook’s analysis of perfect competition?
Although individual perfectly competitive firms won’t pay to advertise, the industry as a whole may well advertise.
Higher costs for one firm in the industry will result in that firm charging a higher price than the other firms in the industry.
If all the firms in an industry charge an identical price for their products, this is clear evidence of collusive behavior.
None of the above