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:

Coupon Interest Rate

The rate at which a bond issuer agrees to pay interest to the bondholders, usually expressed as an annual percentage of the face value of the bond.

Yield To Maturity

The total return anticipated on a bond if held until the date it matures, including all payments of interest and principal.

Par Value

The par value, or face value, is the nominal value of a bond or stock at issuance, typically used for accounting purposes and may not reflect the market value.

Total Rate Of Return

The overall performance of an investment, including both the increase in value and any dividends or interest, over a specific time period.