Assume a Purely Competitive Firm Is Maximizing Profit at Some

question 118

Multiple Choice

Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then

• A) the firm is earning an economic profit.
• B) there is no tendency for the firm's industry to expand or contract.
• C) allocative but not productive efficiency is being achieved.
• D) other firms will enter this industry.

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