If a Perfectly Competitive Firm Is in Long-Run Equilibrium and Market

question 115

Multiple Choice

If a perfectly competitive firm is in long-run equilibrium and market demand suddenly decreases,the firm will experience _____

• A)a greater economic profit.
• B)a normal profit.
• C)a lower average total cost.
• D)a lower average variable cost.
• E)an economic loss.

---

Definitions:

Expected Value

The sum of all possible outcomes of a random process, each multiplied by its probability of occurrence.

Variance

A measure of the dispersion of a set of data points around their mean; mathematically, it is the average of the squared differences from the mean.

Random Variable

A variable that assumes numerical outcomes as a result of random events.

Constant

A value that remains unchanged throughout the execution of a process or formula.