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A Perfectly Competitive Market Is in Short-Run Equilibrium with Price

question 67

Multiple Choice

A perfectly competitive market is in short-run equilibrium with price below average total cost.Which one of the following is not a prediction of the long-run consequences of such a situation?


Definitions:

Weekly World News

A largely fictional news tabloid known for its outlandish cover stories, often involving supernatural or bizarre events.

Local Grocery Store

A retail store that primarily sells food, including fresh produce, meats, dairy, and other groceries, catering to the local community's needs.

Price Elasticity

A measure of how the quantity demanded of a good responds to a change in the price of that good.

Profit-maximizing Price

The price level at which a firm can maximize its profit, calculated where marginal cost equals marginal revenue.

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