If a Price-Taker Industry Is in Long-Run Equilibrium, the Market

question 216

Multiple Choice

If a price-taker industry is in long-run equilibrium, the market price in the industry will be just sufficient to cover the firm's average

• A) total costs.
• B) fixed costs.
• C) variable costs.
• D) variable costs plus a 10 percent accounting profit.

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Definitions:

Retained Earnings

Profit accumulated over time by a company, after dividend payments to shareholders, which is reinvested in its business.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Assets

Resources owned by a person or company that have economic value or can provide future benefits, such as cash, property, or investments.

Equipment

Tools, machinery, or other necessary items for a particular purpose or activity.