Which of the Following Is True in a Long-Run Competitive

question 46

Multiple Choice

Which of the following is true in a long-run competitive equilibrium?

• A)Price is greater than average total cost.
• B)Profits are greater than zero.
• C)Marginal cost is greater than average total cost.
• D)Market supply is greater than market demand.
• E)There is no incentive to enter or exit the industry.

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Definitions:

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporations or governmental entities, which pays back with interest.

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, responsibilities, and liabilities.

Legal Entities

Organizations or structures that have legal rights and obligations, including the capacity to enter into contracts and sue or be sued.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having a partial ownership in the company.