Which of the Following Statements About a Firm in Long-Run

question 12

Multiple Choice

Which of the following statements about a firm in long-run equilibrium is true?

• A) P = MC for firms in both monopolistic competition and perfect competition.
• B) MR > P for a firm in monopolistic competition, and P = ATC for a firm in perfect competition.
• C) P > MC for a firm in monopolistic competition, and P = ATC for a firm in perfect competition.
• D) P = MC for a firm in perfect competition, and P < ATC for a firm in monopolistic competition.
• E) Both answers A and B are correct.

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Definitions:

Dividends Per Share

Measures the extent to which earnings are being distributed to common shareholders.

Liquidity

The simplicity of turning an asset into cash without impacting its market value.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company using its assets to generate sales or revenue.

Earnings Per Share

A financial ratio indicating the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.