In the Long Run, Firms Will Enter Industries Where Price

question 137

Multiple Choice

In the long run, firms will enter industries where price is:

• A) greater than average cost.
• B) equal to average cost.
• C) less than average cost.
• D) positive.

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Definitions:

Marginal Cost

The rise in overall expenses incurred from manufacturing an extra unit of a good or service.

Economic Profit

The separation between total proceeds and cumulative costs, covering both explicit financial outlays and implied expenses.

Opportunity Costs

The loss of potential gain from other alternatives when one particular alternative is chosen over others.

Marginal Revenue

The supplementary income produced through the sale of an extra unit of a product or service.