Properties of long-run competitive equilibrium with free entry include:
A. an equilibrium price equal to the minimum AC.
B. firms earning zero profits.
C. active firms producing at their efficient scales of production.
D. All of these are properties of long-run competitive equilibrium.
D. All of these are properties of long-run competitive equilibrium.
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
In the short run, if a firm's total variable cost curve lies above its total revenue curve at all possible output levels, the firm's minimum short-run loss
a. equals its total fixed cost b. equals zero c. occurs at the maximum point of the total revenue curve d. occurs at the maximum point of its marginal revenue curve e. occurs at the minimum point of its marginal cost curve
All else equal, which of the following would tend to cause real GDP per person to rise?
a. a change from inward-oriented policies to outward-oriented policies b. an increase in investment in human capital c. strengthening of property rights. d. All of the above are correct.
Price wars among firms
A. Tend to reduce short-run price stickiness because firms know they can lower their own prices without rival firms lowering their prices B. Occur when one firm lowers its price and rival firms react by lowering their prices C. Occur when firms use advertising to take customers away from rival firms D. Have no impact on the degree of short-run price stickiness