When a Perfectly Competitive Industry Is in Long-Run Equilibrium, Firms

question 83

Multiple Choice

When a perfectly competitive industry is in long-run equilibrium, firms maximize profits, and entry forces the price down

• A)until all firms with losses leave the industry.
• B)until each firm can earn acceptable level of economic profit.
• C)until price becomes tangent to the long-run average cost curve.
• D)until the long-run average cost curve rises above the demand curve.

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Definitions:

Accounts Payable

Liabilities owed by a business to its creditors for goods and services purchased on credit, which are due within a short period.

Financing Activities

Transactions and events that affect a company's capital structure, including borrowing, repaying debt, issuing equity, and paying dividends.

Statement Of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.