Does a competitive long-run equilibrium require cost-minimization?
A) Yes, if firms fail to be as efficient as their competitors, they are driven out of the market.
B) No, in the long run, firms make zero profits.
C) Yes, if they didn't, even less efficient firms would enter the industry.
D) No, because competition ensures their survival.
A
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Suppose you have a money income of $10 all of which you spend on Coke and popcorn. In the above diagram, the prices of Coke and popcorn respectively are:
A) $.50 and $1.00. B) $1.00 and $.50. C) $1.00 and $2.00. D) $.40 and $.50.
If the marginal product of labor increases because of a shift of the MP curve, that will likely cause
a. an increase in the price of output produced by labor b. an increase in labor demand c. an increase in labor supply d. a fall in the wage paid to labor e. a fall in the number of workers employed