Assume a Purely Competitive Firm Is Maximizing Profit at Some

question 32

Multiple Choice

Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then

• A)the firm is earning an economic profit.
• B)there is no tendency for the firm's industry to expand or contract.
• C)allocative but not productive efficiency is being achieved.
• D)other firms will enter this industry.

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Definitions:

Abbreviation

The shortened form of a word or phrase, used to simplify longer terms without losing their meaning.

Deci-

A metric prefix denoting a factor of one tenth.

Grain

Small, hard seeds of cereal plants like wheat and rice, consumed as food.

Abbreviation

A shortened form of a word or phrase, used typically to save space or for convenience.