Figure: Comparing Long-Run Equilibriums (Figure: Comparing Long-Run Equilibriums) in the Figure

question 63

Multiple Choice

Figure: Comparing Long-Run Equilibriums (Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the following statements is false?

• A)The major difference between firms in the market structure shown in panel a and panel b is that firms in panel a cannot have excess profits in the long run, but those in panel b can have excess profits in the long run.
• B)Panel a and panel b show markets in which firms are covering all of their implicit and explicit costs.
• C)Firms in the market shown in panel a produce identical products, whereas firms in the market shown in panel b produce similar products.
• D)Panel a and the panel b show markets that have many firms.

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Definitions:

Invested Assets

Assets that have been purchased or acquired for the purpose of generating income or profit, not for immediate resale.

Minimum Return

The lowest acceptable rate of return on an investment that a manager or investor is willing to accept.

Residual Income

Residual income is the amount of net income generated in excess of the minimum rate of return. It's often used to assess the performance of business units.

Invested Assets

Resources or funds that have been allocated for investment purposes in various types of assets, such as stocks, bonds, or real estate, aiming for potential returns.