Under Perfect Competition

question 26

Multiple Choice

Under perfect competition

• A)economic profits are greater than accounting profits.
• B)the most efficient output is always the most profitable level of output.
• C)the firms demand and marginal revenue curves are equal only in the short run.
• D)economic profits are always zero in the long run.

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Definitions:

Actual Interactions

Real-life exchanges or communications between individuals, groups, or entities.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry, and perfect information among buyers and sellers.

Close Substitutes

Products or services that can easily replace each other in the eyes of consumers due to their similar functions or characteristics.

Imperfectly Competitive

A market structure where individual producers have some control over the price and supply of products, as opposed to perfect competition where no single producer can influence the market.