In the Long Run, If Price Is Less Than Average

question 42

Multiple Choice

In the long run, if price is less than average cost

• A)there is an incentive for firms to exit the market.
• B)there is profit incentive for firms to enter the market.
• C)the market must be in long-run equilibrium.
• D)there is no incentive for the number of firms in the market to change.

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Definitions:

Correlation Coefficient

A numerical index of the degree of relationship that exists between two variables.

Strength

The quality or state of being physically strong, as well as a person's mental or emotional ability to deal with difficult situations.

Direction

Guidance or instructions on how to proceed; or, the course along which something moves.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, showing the strength and direction of their relationship.