When a Perfectly Competitive Firm Is in Long-Run Equilibrium, Economic

question 431

Multiple Choice

When a perfectly competitive firm is in long-run equilibrium, economic profits

• A) are positive.
• B) are zero.
• C) are negative.
• D) may be positive, zero or negative depending upon costs.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, considered a non-operating expense on the income statement.

Contract Rate

The specific interest rate established in a lending or financial agreement, often determining the amount of interest a borrower will pay over the term of a contract.

Present Value

Today's monetary value of a forthcoming sum or series of cash flows, after considering a specified rate of return.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to account for the time value of money.