In the Long Run

question 15

Multiple Choice

In the long run

• A) the firm shuts down if revenue is less than its avoidable costs.
• B) marginal profit is greater than zero.
• C) firms shut down if economic profit is zero.
• D) supply curves are identical to the short run supply curves.

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Definitions:

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.

Marginal Cost

Incremental expenditure incurred by manufacturing an additional unit of a product or service.

Selling Price

The price at which a product or service is sold to customers.

Marginal Cost

Expenditure incurred in producing an additional unit of a good or service.