In the Long-Run Equilibrium of a Market with Free Entry

question 151

Multiple Choice

In the long-run equilibrium of a market with free entry and exit, if all firms have the same cost structure, then

• A)marginal cost exceeds average total cost.
• B)the price of the good exceeds average total cost.
• C)average total cost exceeds the price of the good.
• D)firms are operating at their efficient scale.

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Definitions:

Functional

Designed to be practical and useful, often relating to the specific duties or activities that an object or person performs.

Geographical Departmentalization

An organizational structure in which departments are organized based on geographic regions or areas.