Properties of Long-Run Competitive Equilibrium with Free Entry Include

question 22

Multiple Choice

Properties of long-run competitive equilibrium with free entry include

• A) The equilibrium price must equal the minimum MC
• B) Firms must earn positive profits
• C) Active firms must produce at their efficient scale of production
• D) All of these

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Definitions:

Word of Mouth

The passing of information from person to person through oral communication, which can have a significant impact on perceptions and behavior.

Trial and Error

A problem-solving method involving repeated, varied attempts which are continued until success, or until the agent stops trying.

Centralization Principle

A management approach where decision-making authority is concentrated in the higher levels of an organization.

Fayol's Centralization

A principle proposed by Henri Fayol that advocates for the concentration of decision-making authority at the top levels of an organization.