Does a Competitive Long-Run Equilibrium Require Cost-Minimization

question 78

Multiple Choice

Does a competitive long-run equilibrium require cost-minimization?

• A) Yes, if firms fail to be as efficient as their competitors, they are driven out of the market.
• B) No, in the long run, firms make zero profits.
• C) Yes, if they didn't, even less efficient firms would enter the industry.
• D) No, because competition ensures their survival.

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Definitions:

Chief Cells

Cells located in the stomach lining that secrete pepsinogen, an inactive precursor of the enzyme pepsin involved in protein digestion.

Parathyroid Gland

Small glands located behind the thyroid gland that regulate calcium levels in the blood through the secretion of parathyroid hormone.

Cortisol

Cortisol is a steroid hormone produced by the adrenal glands involved in the body's stress response as well as in metabolism, immune response, and regulation of inflammation.

Adrenal Gland

A pair of small glands located on top of each kidney that produce a variety of hormones including adrenaline and steroids.