In the Long Run, Firms Can

question 50

Multiple Choice

In the long run, firms can:

• A) not vary any inputs.
• B) vary all inputs and leave the industry if they earn negative profit.
• C) vary only some inputs and enter the industry if they earn negative profit.
• D) manipulate the market price.

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Definitions:

Demand Curve

A graphical representation of the demand function, showing the relationship between the price of a good and the quantity demanded, typically downward-sloping.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at different prices.

Profit-Maximizing Output

The point of production where a company reaches its maximum possible profit.

Antimacassars

Protective coverings placed over the backs or arms of chairs and sofas to prevent soiling or wear, originally designed to protect furniture from the macassar oil used in men's hair grooming in the 19th century.