Question

state whether the following statements are true or false. 1. the economic maxim \theres no cash on the table\ means that there are never any unexploited economic opportunities. 2. firms in competitive environments make no accounting profit when the market is in long - run equilibrium. 3. firms that can introduce cost - saving innovations can make an economic profit in the short run.

Explanation:

1. The economic maxim "There's no cash on the table" means that in the long - run, there are no unexploited economic opportunities. But in the short - run, there can be unexploited opportunities. So the statement is false.
2. In long - run equilibrium, firms in competitive environments make zero economic profit. But accounting profit is positive as it does not subtract implicit costs. So the statement is false.
3. Firms that introduce cost - saving innovations can have lower costs than competitors in the short - run. If price is above their new average total cost, they can make an economic profit. So the statement is true.

Answer:

1. False
2. False
3. True