In the Long Run, Current Output Will

question 76

Multiple Choice

In the long run, current output will:

• A) equal potential output.
• B) be less than potential output.
• C) be above potential output.
• D) only equal potential output if unemployment is zero.

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Definitions:

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, strict regulations, or established brand loyalty.

Economic Profits

The excess of total revenues over total costs, including both explicit costs and opportunity costs, indicating a return beyond the normal profit level.

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Perfect Competitor

A theoretical market structure where many firms sell homogeneous products, entry and exit from the market are free, and all participants have perfect information.