In the long-run equilibrium for a perfectly competitive market
A) the firms' economic profits are zero.
B) there is no incentive for entry or exit.
C) average total costs of production are minimized.
D) All of the above are correct.
D
Economics
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Economics
You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40, r = $100, MPL = 4, and MPK = 40 the firm:
A. should use more K and less L to cost minimize. B. is profit maximizing but not cost minimizing. C. is cost minimizing. D. should use less L and more K to cost minimize.
Economics