With Free Entry

question 50

Multiple Choice

With free entry:

• A) there is a known and limited number of potential suppliers that can produce a good in the long run.
• B) there is an unlimited number of firms that can produce a good in the long run.
• C) the long run market supply curve is vertical at the market quantity.
• D) the long run market demand curve is horizontal at the market price.

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Definitions:

Average Variable Cost

The total variable costs (costs that change with output level) of production divided by the quantity of output produced.

Fixed Costs

Fixed costs are business expenses that remain unchanged regardless of the level of goods or services produced, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales, such as raw materials and labor expenses.

Steel

An alloy of iron and carbon, and sometimes other elements, known for its high tensile strength and ability to be shaped into various forms.