Price Equals the Minimum of Long-Run Average Cost

question 399

Multiple Choice

Price equals the minimum of long-run average cost

• A) in a long-run equilibrium.
• B) in a short-run equilibrium as well as in a long-run equilibrium.
• C) whenever average revenue equals marginal cost.
• D) along a horizontal long-run supply curve, but not along an upward sloping long-run supply curve.

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Definitions:

Economic Perspective

The viewpoint from which economic analysts assess and interpret the workings of economic systems and the behavior of economic agents.

Foreign Competition

The competition that domestic companies face from products and services produced in other countries.

Adam Smith

A Scottish economist and philosopher known as the father of modern economics, famous for his work "The Wealth of Nations."

David Ricardo

David Ricardo was a British political economist best known for his theories on comparative advantage, which describe how nations can benefit from trading.