in long-run equilibrium in a competitive market, firms are operating at ?
Correct answer: B. all of these answers are correct
- A. the minimum of their average-total-cost curves
- B. all of these answers are correct
- C. their efficient scale
- D. zero economic profit
- E. intersection of marginal cost and marginal revenue
Explanation
In long-run competitive equilibrium, entry and exit lead to zero economic profit, operation at the minimum of ATC, and production at the efficient scale; firms also choose output where MC equals MR. Thus all listed conditions are correct under the standard model.
Last updated
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,705 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Economics questions like this
Economics is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
Related questions
_____ 1954 study of U.S trade patterns showed that U.S exports were labor-intensive compared with U.S imports, even though the United States was widely regarded as a relatively capital-abundant nation ?
A attempts to limit outsourcing of jobs to foreigners by requiring that a minimum percentage of a product's value must be produced domestically if that good is to be sold in the domestic market ?
A binding price ceiling creates?
A borrower gives to creditor a security to grantee repayment of a loan. What is this security called ?
A buyer's willingness to pay is that buyer's ?