When a Perfectly Competitive Industry Is in Long-Run Equilibrium, Firms

question 190

Multiple Choice

When a perfectly competitive industry is in long-run equilibrium, firms maximize profits, and entry forces the price down

• A)until all loss making firms leave the industry.
• B)until each firm can earn acceptable level of economic profit.
• C)until price becomes tangent to the long run average cost curve.
• D)until the long average cost curve rises above the demand curve.

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Definitions:

Seasonal Indexes

Quantitative measures that adjust for seasonal variations in data, allowing for more accurate comparison across different time periods.

Centered Moving Averages

A type of moving average that smoothes out short-term fluctuations in a time series dataset by averaging a subset of terms at a time, centered around each point in the series.

Quarterly

Pertaining to a period of three months or occurring four times a year.

Forecasted Value

An estimate of what a variable's value will be at a future point in time, based on patterns observed in past data.