The Long Run Is a Period of Time

question 90

Multiple Choice

The long run is a period of time

• A) when the economy is at potential GDP.
• B) when some input prices do not change.
• C) when the inflation rate is zero.
• D) longer than 1 year.
• E) longer than 10 years.

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Definitions:

Monopolistic Competition

A market structure marked by many competing firms offering products or services that are similar, but not perfect substitutes.

Oligopoly

A market structure characterized by a small number of firms controlling a large portion of the market share, leading to limited competition.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and all firms in an industry are making normal profit, resulting in market stability over time.

Average Total Cost

The total cost of production (fixed and variable costs) divided by the total quantity of output produced.