A Firm Operating in a Perfectly Competitive Market Earns Zero

question 224

True/False

A firm operating in a perfectly competitive market earns zero economic profit in the long run but remains in business because the firm's revenues cover the business owners' opportunity costs.

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Definitions:

Labor Standards

Benchmarks or norms established for the amount of labor required to perform a task efficiently, often used to set production targets and labor budgets.

Particular Product

A specific item or good offered for sale by a business.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or budgeted) cost of labor based on standard rates and hours.

Labor Standards

Benchmarks or norms for the amount of labor time required to perform a certain task or produce a certain amount of goods.