One Difference Between the Long Run and the Short Run

question 158

Multiple Choice

One difference between the long run and the short run in a perfectly competitive industry is that:

• A)economic profit in the long run is always greater than it is in the short run.
• B)economic profit in the short run is always greater than it is in the long run.
• C)firms necessarily earn zero economic profit in the long run but may earn positive or negative economic profit in the short run.
• D)firms necessarily earn positive economic profit in the long run but may earn positive or negative economic profit in the short run.

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Definitions:

Manufacturing Firms

Companies engaged in the industrial production of goods, transforming raw materials into finished products through manual labor or machinery.

Industrial Market

The market for goods and services traded among businesses and institutions, rather than between businesses and private consumers.

Fisheries

Industry or activity concerned with catching, processing, or selling fish, shellfish, and sometimes whales.

State Governments

The government entities that have jurisdiction over particular states or provinces within a federal system, responsible for local legislation and governance.