In the Long Run,profits Will Equal Zero in a Competitive

question 113

Multiple Choice

In the long run,profits will equal zero in a competitive market because of

• A) constant returns to scale.
• B) identical products being produced by all firms.
• C) the availability of information.
• D) free entry and exit.

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Definitions:

Static Planning Budget

A budget based on a fixed level of activity that does not change with actual levels of output, sales, or other activity measures.

Controlled Costs

Costs that can be influenced or managed by decisions made by managers or company officials.

Actual Costs

Actual costs refer to the genuine expenses incurred in the production, acquisition, or sale of products or services, including materials, labor, and overhead expenses.

Actual Level

The real, observed value or volume of output, production, or activity in a given period.