A Market with Constant Costs Is in Long-Run Equilibrium When

question 58

Multiple Choice

A market with constant costs is in long-run equilibrium when it experiences a permanent decrease in demand.
In the short run,firms in the market ________.
In the long run,some firms ________ the market.
Market supply ________ and the market price ________.
Market output ________ and in the long run each remaining firm makes ________ profit.

• A)incur an economic loss;exit;decreases;rises until it reaches the firms' minimum average total cost;decreases;zero economic
• B)make zero economic profit;enter;increases;falls;increases;an economic
• C)incur an economic loss;exit;decreases;rises until it reaches the firms' minimum average total cost;decreases;an economic
• D)make zero economic profit;exit;decreases;rises until it reaches the firms' minimum average variable cost;decreases;an economic
• E)make an economic profit;enter;increases;falls;increases;economic profit

---

Definitions:

Production Department

A division within a company responsible for the actual manufacturing or creation of goods and services.

Labor Constraint

Restrictions or limitations on the availability or use of workers that can affect production or service delivery.

Linear Optimization

A mathematical method for determining the best allocation of limited resources to achieve maximum profit or minimum cost, under a set of linear relationships.

Objective Function

A mathematical formula used in optimization to define the goal of the decision-making process, typically to maximize or minimize some quantity.