When a purely competitive firm is in long run equilibrium

Asked by admin @ 28/10/2021 in Business viewed by 245 People

If the representative firm in a purely competitive industry is in short-run equilibrium and, at its current output level, its marginal cost exceeds its average total cost, then we can conclude thata. the firm is suffering economic losses b. the firm is not maximizing profits in the short runc. some firms will exit the industry in long run d. other firms will enter the industry in the long run

Answered by admin @ 28/10/2021

Answer:

The correct answer is option d.

Explanation:

In a perfectly competitive market, the firms produce at the point where price equals the marginal cost. If marginal cost is higher than the average total cost, it means the price level is also higher than average total cost. This shows that the firms will be having super normal profits.

Other potential firms will be attracted by these profits but they can't join in the short run. Though potential firms will enter the market in the long run.

Able, baker, and charles are engaged in the marketing to and enrollment of beneficiaries into medicare health plans. mr. able is an independent agent paid directly by a health plan. ms. baker is an independent agent paid through a field marketing organization (fmo). mr. charles is an independent agent paid for his work by a third-party marketing organization (tmo). how do the cms compensation rules apply to these three agents?

Asked by maham237 @ 13/01/2021 in Business viewed by 2738 persons

When a purely competitive firm is in long run equilibrium

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