Which of the Following Is a Key Characteristic of the Long-Run

question 52

Multiple Choice

Which of the following is a key characteristic of the long-run competitive equilibrium that distinguishes it from the short-run competitive equilibrium?

• A) Free entry to reduce short-run profits, or free exit to reduce short-run losses.
• B) Economic profits are positive, but cannot be negative.
• C) Marginal revenue is greater than marginal cost.
• D) Average revenue is less than average cost.

Grasp the basic postulate of economics that incentives matter.

Understand the implications of economizing behavior and marginal changes.

Recognize the value of information in making economic decisions.

Analyze the effects of policies and costs on economic decisions.

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Definitions:

Manufacturing Cycle Efficiency

A measure of the efficiency of the production process, typically calculated as the value-added time as a proportion of the total throughput time.

Value-Added Time

The duration during which a product or service is being modified or enhanced to increase its value to the customer.

Throughput Time

The elapsed time from when production is started until finished goods are shipped.

Factory Floor

The operational area within a manufacturing plant where goods are actually produced, typically housing machinery, assembly lines, and workers.