In the Long-Run Equilibrium of a Market with Free Entry

question 151

Multiple Choice

In the long-run equilibrium of a market with free entry and exit, if all firms have the same cost structure, then

• A)marginal cost exceeds average total cost.
• B)the price of the good exceeds average total cost.
• C)average total cost exceeds the price of the good.
• D)firms are operating at their efficient scale.

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Definitions:

FIFO Method

A method used in accounting to value inventory and determine cost of goods sold, assuming the oldest inventory items are sold first.

Material Q

Material Q seems not to be a standard key term in most contexts and without further context appears to be NO.

Job Order Costing

A cost accounting system used to accumulate costs for individual jobs or orders, suitable for companies producing unique or custom products.

Professional Services

Specialized services provided by individuals with expertise or qualifications in particular fields, like law, accounting, or consultancy.