Which of the Following Is Not a Condition of Long-Run

question 109

Multiple Choice

Which of the following is not a condition of long-run equilibrium for perfectly competitive firms?

• A)price is equal to marginal cost
• B)price is equal to minimum short-run average total cost
• C)price is equal to minimum long-run average cost
• D)price is equal to marginal revenue
• E)economic profit is positive

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Definitions:

Increasing Returns

A situation where the addition of more units of input results in a more-than-proportional increase in output.

Competitive Market

A market structure characterized by many buyers and sellers, such that no single party can dictate the market price.

Long-Run Cost

The total cost of production when all inputs, including both fixed and variable costs, are considered fully adjustable.

Economies Of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.