Asked by
Jacob Lancaster
on Dec 12, 2024Verified
Which of the following statements best describes the price, output, and profit conditions of competitive price-searcher markets?
A) Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run.
B) Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
C) Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero.
D) Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.
Economic Profit
The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial gain exceeding opportunity costs.
Marginal Revenue
The extra revenue received from the sale of an additional unit of a product or service.
- Understand the long-run equilibrium conditions in competitive markets and the role of economic profits.
Verified Answer
SE
Learning Objectives
- Understand the long-run equilibrium conditions in competitive markets and the role of economic profits.
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