A Necessary Condition for an Industry to Be in Long-

question 39

Multiple Choice

A necessary condition for an industry to be in long- run competitive equilibrium is:

• A)each firm's profit is positive, but very small.
• B)the firm's short- and long- run marginal costs are equal.
• C)consumers' surplus is maximized.
• D)total revenue is greater than LTC for each firm.

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Definitions:

Total Job Cost

The total expenses associated with a specific job or project, including materials, labor, and overhead costs.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products based on a predetermined formula.

Variable Manufacturing Overhead

Costs that vary proportionally with manufacturing activity, such as indirect materials and utilities.

Markup

The amount added to the cost of goods to cover operating expenses and profit, expressed as a percentage of cost.