The Following Graphs Depict a Perfectly Competitive Firm and Its

question 45

Multiple Choice

The following graphs depict a perfectly competitive firm and its market.
Assume that all firms in this industry have identical cost functions.
In the long run equilibrium in this market,

• A) price will equal $5,and there will be 20 firms in the industry.
• B) price will equal $5,and there will be 10 firms in the industry.
• C) price will equal $8,and there will be 20 firms in the industry.
• D) price will equal $5 and total output will equal 500 units,but there is not enough information to know how many firms there will be.

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Definitions:

Normal Balance

A reiteration with different wording: The typical side (debit or credit) an account is expected to have, based on standard accounting rules.

Account Category

A classification used in accounting to organize financial transactions, such as assets, liabilities, equity, revenue, and expenses.

Net Sales

The total revenue from sales transactions after deducting returns, allowances, and discounts.

Discount Period

A specified period within which a buyer can pay less than the full amount due by taking advantage of a discount offered by the seller.