Comparing the Short- Run and Long- Run Profit- Maximizing Positions

question 111

Multiple Choice

Comparing the short- run and long- run profit- maximizing positions of a perfectly competitive firm, which statement is true?

• A) The firm may have unexploited economies of scale in both the short run and the long run.
• B) Price will equal marginal cost in the short run, but not necessarily in the long run.
• C) Price should equal average cost in the long run, but not necessarily in the short run.
• D) The firm will produce at minimum average cost in both the short and long run.
• E) Economic profit may exist in the short run and in the long run.

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Definitions:

Glomeromycetes

Fungi that partner with plant roots; their hyphae grow inside cell walls of root cells.

Soil Fungi

Fungi that live in the soil, playing critical roles in nutrient cycling, organic matter decomposition, and as symbionts or pathogens of plants.

Hyphae

The long, branching filamentous structures of fungi, which collectively form the mycelium and are the primary mode of vegetative growth.

Hyphae

The long, thread-like structures that make up the body of fungi and some prokaryotic organisms.