Which of the Following Statements Is Not Correct About Competitive

question 280

Multiple Choice

Which of the following statements is not correct about competitive firms?

• A)In a long-run equilibrium, firms must be operating at their efficient scale.
• B)In the short run, the number of firms in an industry may be fixed.
• C)In the long run, the number of firms can adjust to changing market conditions.
• D)In the short run, firms must be operating at a level of output where price equals average variable cost.

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Definitions:

Frustrated Contract

A contract that, through no fault of either party, is rendered incapable of being performed due to an unforeseen event, leading to the contract being void and freeing all parties from their obligations.

Torrential Rains

Intense, heavy rainfall in a short period of time, often leading to flooding.

Doctrine of Frustration

A legal principle that excuses parties from fulfilling contract obligations due to unforeseen circumstances rendering the contract impossible, illegal, or radically different.

Serious Traffic Accident

A vehicular accident that results in significant damage, injuries, or fatalities.