Which Is True of a Purely Competitive Firm in Long-Run

question 143

Multiple Choice

Which is true of a purely competitive firm in long-run equilibrium?

• A) Average fixed cost equals price.
• B) Marginal cost equals marginal product.
• C) Price equals marginal cost.
• D) Average variable cost equals marginal cost.

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Definitions:

Divisional Segment Margin

The amount of profit or loss generated by a specific division or segment of a company, often used to assess the segment's financial performance.

Common Fixed Expenses

Expenses that do not change in total amount with changes in the volume of production or sales, such as rent, salaries, and insurance.

Net Operating Income

The total profit of a company after operating expenses are subtracted from total revenue, but before deducting interest and taxes.

Total Period Cost

The sum of all expenses associated with operating a business during a specific accounting period.