Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?
A. Consumer and producer surplus will be maximized.
B. P = MC = lowest AVC.
C. The minimum willingness to pay equals the maximum acceptable price.
D. We would expect all of these to occur in the long run in a purely competitive market.
Answer: A
You might also like to view...
Appreciation is the term used to describe
a. the conversion of one currency into another currency in the free market b. a reduction in the official value of a currency. c. the upward movement of currencies in a free market. d. an increase in the official value of a currency.
The Fab Five, a cartel of five firms, sells a homogenous product. The Oct-Pool cartel is composed of eight firms that can differentiate their products. In the given scenario, which of the following statements is true?
a. The firms of both cartels are likely to cheat on their cartel agreements. b. The firms of both cartels are unlikely to cheat on their cartel agreements. c. The Fab Five cartel firms are likely to cheat on their cartel agreement, while the Oct-Pool cartel firms are unlikely to cheat on their cartel agreement. d. The Oct-Pool cartel firms are likely to cheat on their cartel agreement, while the Fab Five cartel firms are unlikely to cheat on their cartel agreement.