Which of the Following Is True When Long-Run Equilibrium Conditions

question 106

Multiple Choice

Which of the following is true when long-run equilibrium conditions are present in price-taker and competitive price-searcher markets?

• A) MR = ATC in both price-taker and competitive price-searcher markets.
• B) P = ATC in price-taker markets; P = MC in competitive price-searcher markets.
• C) P = MC in both price-taker and competitive price-searcher markets.
• D) P = ATC in both price-taker and competitive price-searcher markets.

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Definitions:

Flexible Prices

Product prices that freely move upward or downward when product demand or supply changes.

Product Demand

The desire and willingness to purchase a specific good or service in the market.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Homogeneous Oligopoly

A market structure in which a few companies sell products that are identical or very similar, leading to high levels of competition on price rather than product differentiation.