Long-Run Equilibrium in Perfect Competition and in Monopolistic Competition Are

question 15

Multiple Choice

Long-run equilibrium in perfect competition and in monopolistic competition are similar because in both models,firms _____ in the long run.

• A)produce at the minimum point of the average total cost curve
• B)set price equal to marginal cost
• C)make zero economic profits
• D)have excess capacity

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Definitions:

Annual Interest

The amount of interest due over the course of a year on a loan or financial investment.

Merchandise

Goods bought and sold in business operations, often referred to as stock or inventory.

Perpetual Inventory System

An inventory management approach where inventory levels are updated in real-time following each transaction.

Cash Payment

The act of settling a debt or purchasing an asset with cash, as opposed to using credit.