A firm in a perfectly competitive market will exit the market in the long run if: (a)
Question:
(a) the market price falls below the average variable cost.
(b) the market price falls below the average fixed cost.
(c) the market price falls below the average total cost.
(d) the market price falls below marginal cost.
(e) None of the above
Which of the following statements about perfectly competitive markets is FALSE?
(a) In the long run, firms in a perfectly competitive market will always make zero profits
(b) Individual firms cannot influence the price.
(c) The price is always equal to the marginal cost.
(d) Firms price goods so that the markup over marginal cost is equal to where p is equal to the own-price elasticity of demand.
(e) None of the above
The Lerner Index describes
(a) the relationship between the firm's average fixed cost and the elasticity of demand.
(b) the firm's ability to markup price over marginal cost.
(c) the concentration of the market.
(d) all of the above
(e) none of the above
Expert Answer:
The detailed answer for the above question is provided below The questions are complete Here are the ... View the full answer
