In Reference to the Long-Run Firm Competitive Equilibrium Diagram, Which

question 245

Multiple Choice

In reference to the long-run firm competitive equilibrium diagram, which of the following statements is INCORRECT?

• A) In the long run, the firm has no incentive to alter its scale of operations.
• B) Because profits must be zero in the long run, the firm's short-run average costs (SA
• C) must equal P at Qe, which occurs at minimum SAC.
• C) In the long run, the firm operates where price, marginal revenue, marginal cost, short-run minimum average cost, and long-run minimum average cost all are equal.
• D) In the long run, this firm must be part of a constant-cost industry, because its marginal revenue curve is perfectly elastic.