In the Long-Run Equilibrium of a Market with Free Entry

question 19

Multiple Choice

In the long-run equilibrium of a market with free entry and exit, marginal firms are operating

• A)at the point where average variable cost equals marginal cost.
• B)at the minimum point on their marginal cost curves.
• C)at their efficient scale.
• D)where accounting profit is zero.

---

Definitions:

Account Category

A classification within accounting used to group similar types of accounts, such as assets, liabilities, equity, revenue, and expenses.

Accounts Receivable Subsidiary Ledger

is a detailed ledger showing individual transactions and balances for customers who owe money to the business, supplementing the general ledger.

Control Account

A general ledger account that summarizes and controls the total amounts recorded in subsidiary ledgers.

Cash Sales

Transactions where payment is made in cash at the time of purchase.