In the Long-Run Equilibrium in a Perfectly Competitive Market

question 146

Multiple Choice

In the long-run equilibrium in a perfectly competitive market,

• A) the firms make an economic profit.
• B) the firms' owners make a normal profit.
• C) the average total cost is maximized.
• D) marginal cost is at a minimum.

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Definitions:

Value Line Index

An index that represents the performance of approximately 1,700 stocks in the Value Line Arithmetic and Geometric averages.

Equally-Weighted

An equally-weighted index strategy involves assigning each asset in a portfolio or index the same relative weight, contrasting with market-cap-weighted indexes where larger companies carry more weight.

Reward to Volatility

A measure of the return an investment provides relative to its volatility, used in evaluating the performance of an investment's risk.

Portfolio Excess

Refers to the amount by which the return of a portfolio exceeds the return of a benchmark or risk-free rate.