Which of the Following Is Not a Condition of Long-Run

question 87

Multiple Choice

Which of the following is not a condition of long-run competitive equilibrium?

• A)Economic profits are zero.
• B)Marginal revenue is greater than marginal cost.
• C)Price is equal to marginal cost.
• D)Firms do not have an incentive to change plant size.

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Definitions:

Variable Cost

Costs that adapt in response to modifications in business activity volume.

Fixed Cost Per Unit

The total fixed costs of production divided by the number of units produced, indicating how cost allocation changes with production volume.

Production Increases

The rise in the number of goods and services produced by a company or country, often indicative of economic growth.

Variable Costs

Costs that vary directly and proportionally with the level of production or sales volume, such as raw materials and direct labor costs.