When a Purely Competitive Firm Is in Long-Run Equilibrium, Price

question 27

Multiple Choice

When a purely competitive firm is in long-run equilibrium, price is equal to

• A) marginal cost but may be greater or less than average cost.
• B) minimum average cost and also to marginal cost.
• C) minimum average cost but may be greater or less than marginal cost.
• D) marginal revenue but may be greater or less than both average and marginal cost.

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Definitions:

Minimum Wage

The lowest legal wage that employers can pay their employees, established by government law.

Unemployed People

Individuals of working age who are without work, but are available for and seeking employment.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, which has been accelerated by advances in transportation and communication technology, with significant implications for economies, culture, and political systems.

Hourly Wages

The amount of money paid to an employee for one hour of work.