Which of the Following Statements Best Describes the Price, Output

question 110

Multiple Choice

Which of the following statements best describes the price, output, and profit conditions of competitive price-searcher markets?

• A) Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run.
• B) Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
• C) Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero.
• D) Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.

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Definitions:

Feasible Solution

A practical and achievable resolution to a problem that can realistically be implemented.

Generating Solutions

The process of coming up with multiple answers or ways to address problems or challenges.

Practical Solution

A viable and straightforward answer or method to resolve a problem or address a situation, often emphasizing effectiveness and simplicity.

Ridiculous Alternatives

A technique used in problem-solving or therapeutic contexts to spur creativity by considering seemingly absurd or impractical options.