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Economics
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23 Nov 2019

In long-run competitive market equilibrium, price equals _____ and economic profit is _____.


a) minimum average variable cost; greater than zero

b) minimum average total cost; zero

c) maximum marginal cost;zero

d)minimum fixed cost; greater than zero

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26 Aug 2019
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Related questions

Which of the following is true of a monopolistically competitive firm in long-run equilibrium?
a. Price equals marginal cost and average total cost.
b. Price equals average total cost but is greater than marginal cost.Ā 
c. Price equals marginal cost and is greater than average total cost.Ā 
d. The firm earns positive economic profits by producing at minimum average cost.Ā 

How does the long-run equilibrium for a monopolistically competitive market differ from the long-run equilibrium for a perfectly competitive market? One way in which monopolistically competitive markets and perfectly competitive markets differ is that in long-run equilibrium, monopolistically competitive firms

A. charge a price greater than marginal cost.

B. do not earn zero economic profits.

C. charge a price less than marginal revenue.

D. produce at a minimum of marginal cost.

E. produce where marginal revenue is less than marginal cost.

In a perfectly competitive industry, economic profit:

A. Can persist in the long run because of barriers to entry.

B. Can persist in the long run because of homogeneous products.

C. Will approach zero in the long run as prices are driven to zero.

D. Will approach zero in the long run as prices are driven to the level of average production costs.

Ā 

D. Will approach zero in the long run as prices are driven to the level of average production costs.

Since the long-run profit-maximizing condition is the minimum of Long-run average total cost=Marginal Cost=Price, the firm earns zero economic profit in the long run.

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