In a Competitive Industry in the Long-Run, It Is Likely

question 2

Multiple Choice

In a competitive industry in the long-run, it is likely that

• A)firms with the advantage of location or an especially skilled work crew will be the lone survivors in equilibrium.
• B)all firms giving their best effort will have the same LAC regardless of location or the unique skills of some workers.
• C)the firms with the poorest location will be the lone survivors in equilibrium because their location cost will be lowest.
• D)only one large efficient firm can survive.

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Definitions:

Unemployment Spells

Periods during which an individual is out of work and actively seeking employment but unable to find a job.

Long-Run Unemployment

Unemployment that persists in an economy for an extended period, typically occurring due to structural changes in the economy such as technological advances or shifts in consumer demand.

Unemployment Rate

The proportion of the labor force that is without work but actively seeking employment and willing to work, expressed as a percentage.

U-4 Measure

A specific measure of unemployment that includes all persons who are not currently working but are willing to work and actively seeking employment, plus discouraged workers.