The long-run equilibrium condition for perfect competition is:
a. P = AVC = MR = MC.
b. P = ATC = MR = MC.
c. Q = AVC = MR = MC.
d. Q = ATC = MR = MC.
e. TR = ATC = MR = MC.
b
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Indicate whether the statement is true or false
If the average total cost curve is always above the demand curve of a monopolist: a. that monopolist will suffer economic losses
b. entry will occur, forcing the monopolist to reduce price and expand output. c. the monopolist will earn an economic profit. d. the monopolist must be producing inefficiently.
Given the Leontief production function Q = min{5.5K, 6.7L}, how much output is produced when K = 40 and L = 35?
A. 268 B. 192.5 C. 234.5 D. 220
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits. B. increase their output. C. decrease their output. D. stop producing since it is earning a loss.