In a Long-Run Equilibrium

question 191

Multiple Choice

In a long-run equilibrium,

• A)only a perfectly competitive firm operates at its efficient scale.
• B)only a monopolistically competitive firm operates at its efficient scale.
• C)neither a competitive firm nor a monopolistically competitive firm charges a markup over marginal cost.
• D)both a perfectly competitive firm and a monopolistically competitive firm operate at their efficient scale of production.

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Definitions:

Investing Activities

Financial activities related to buying or selling long-term assets and investments, a key component of a company’s cash flow statement.

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowing of the company.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Indirect Method

A cash flow statement formulation approach that adjusts net income for changes in non-cash accounts to calculate operating cash flow.