Which of the Following Is True

question 10

Multiple Choice

Which of the following is true?

• A) The long-run industry supply curve relates the price of a good or service to the quantity produced after all adjustments to a price change have been completed.
• B) Every point on a long-run industry supply curve shows a price and quantity supplied at which firms in the industry are earning positive economic profit.
• C) In establishing the long-run industry supply curve, factor costs and the number of firms are held constant.
• D) In perfectly competitive industries, the long-run supply curve is always horizontal.

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Definitions:

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Monopolistic Competition

A market structure in which many firms sell products that are similar but not identical, allowing for some degree of market power.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.

Free Entry

The condition in which new firms can enter the market with no or minimal barriers, promoting competition.