In the Long Run, a Perfectly Competitive Firm Can

question 33

Multiple Choice

In the long run, a perfectly competitive firm can

• A) only make an economic profit.
• B) only make zero economic profit.
• C) only incur an economic loss.
• D) make an economic profit, make zero economic profit, or incur an economic loss.

---

Definitions:

Direct Labor Hour

A measure of the labor time specifically involved in the direct manufacture of products, not including indirect tasks.

Direct Labor Rate Variance

It's a measure used in cost accounting to determine the difference between the actual labor cost per hour and the expected (or standard) cost per hour.

Direct Labor Time Variance

The difference between the actual time taken to manufacture a product and the standard time expected, multiplied by the wage rate, indicating inefficiency or efficiency in production.

Standard Hours Per Unit

The predetermined amount of time expected to be required to produce one unit of a product under standard operating conditions.