Author Question: Which of the following is a key characteristic of the long-run competitive equilibrium that ... (Read 63 times)

Mr3Hunna · **on:** Jun 30, 2018

Which of the following is a key characteristic of the long-run competitive equilibrium that distinguishes it from the short-run competitive equilibrium?
a. Free entry to reduce short-run profits, or free exit to reduce short-run losses.
b. Economic profits are positive, but cannot be negative.
c. Marginal revenue is greater than marginal cost.
d. Average revenue is less than average cost.

Question 2

If a 10 percent price increase causes the quantity demanded for a good to decrease by 20 percent, demand is elastic.
a. True
b. False
Indicate whether the statement is true or false