Consider a Perfectly Competitive Firm When Its Industry Is in Long-Run

question 99

Multiple Choice

Consider a perfectly competitive firm when its industry is in long-run equilibrium.In this case,

• A)price is greater than marginal cost.
• B)marginal revenue is greater than marginal cost.
• C)price equals minimum short-run and long-run average total cost.
• D)economic profits are greater than zero.
• E)average fixed costs are at the maximum.

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Definitions:

Spending Multiplier

The ratio of a change in national income to a change in government spending that causes it, indicating the impact of fiscal policy on the economy.

Long Run

A period of time in economics where all factors of production and costs are variable, and all market adjustments have been made.

Futures Contracts

Standardized legal agreements to buy or sell something at a predetermined future date and price, typically used for commodities or financial instruments.

Forward Contracts

Non-standardized contracts between two parties to buy or sell an asset at a specified future time at a price agreed upon today.