In Long-Run Equilibrium, Both Purely Competitive and Monopolistically Competitive Firms

question 161

Multiple Choice

In long-run equilibrium, both purely competitive and monopolistically competitive firms will

• A) produce at minimum average total cost.
• B) earn economic profits.
• C) achieve allocative efficiency.
• D) equate marginal cost and marginal revenue.

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Definitions:

Warranty Expense

This is an accounting term for the cost that a company anticipates or incurs due to the repair or replacement of products under warranty.

Sales Units

The quantity or number of products sold or services rendered by a business during a specific period.

Product Warranty Payable

A liability account that records the estimated amounts a company expects to pay for warranties on products it has sold.

Product Warranty Expense

Costs associated with the repair or replacement of faulty products that have been sold, under the terms of a product warranty.