If Long-Run Equilibrium Is Present in a Competitive Market, the Typical

question 147

Multiple Choice

If long-run equilibrium is present in a competitive market, the typical firm in the market will be

• A) making economic losses.
• B) making zero economic profit.
• C) making economic profit.
• D) making a rate of return that is higher than the rate earned in other industries.
• E) both c and d are correct.

---

Definitions:

Selling Season

A specific period during the year in which sales activity and demand for certain products or services significantly increase.

Cost of Overstocking

Expense incurred from holding too much inventory, including storage costs, decreased product value, and potential obsolescence.

Cost of Understocking

The financial and operational impact of not having enough inventory to meet demand, leading to lost sales and dissatisfied customers.

Product Availability

The extent to which goods or services can be purchased from suppliers by consumers at any given time.