​In the Long Run, If We Observe Firms in a Competitive

question 230

True/False

​In the long run, if we observe firms in a competitive market earning economic profits, we know that this market is in long-run equilibrium.

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Definitions:

Incremental Cost

The additional cost associated with producing one additional unit of output.

Carrying Receivables

The accounting practice of recognizing unpaid invoices as assets on a company's balance sheet, expected to be converted into cash within a year.

Economic Ordering Quantity

The optimal number of units to order to minimize the total costs associated with buying, delivering, and storing inventory.

Inventory Carrying Costs

Inventory carrying costs include all expenses related to holding and storing unsold goods, such as warehousing, insurance, and spoilage.