Which of the Following Is NOT a Necessary Condition for Long-Run

question 81

Multiple Choice

Which of the following is NOT a necessary condition for long-run equilibrium under perfect competition?

• A) No firm has an incentive to enter the market.
• B) No firm has an incentive to exit the market.
• C) Prices are relatively low.
• D) Each firm earns zero economic profit.
• E) Each firm is maximizing profit.

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Definitions:

Market Basket

A representative collection of goods and services used to track price changes for consumer expenditure and calculate inflation rates.

Base Year

A reference year against which economic or financial data is compared and indexed.

Current Year

Refers to the ongoing calendar year in which a statement is made or an event occurs.

GDP Price Index

A measure that compares the current price level of goods and services included in GDP to the price level in a base year.