If a perfectly competitive firm operates in the short run and expands in the long run, then the firm's short run condition is A) TR TC. B) TR TVC and TR

Question

If a perfectly competitive firm operates in the short run and expands in the long run, then the firm's short run condition is A) TR > TC. B) TR >TVC and TR < TC. C) TR < TVC. D) TR < TFC.

Quizplus · Accepted Answer

In the short run, if a perfectly competitive firm decides to expand in the long run, it indicates that the firm is making a profit, which occurs when total revenue (TR) is greater than total cost (TC). This profitability signals the firm that it is beneficial to expand operations.

If a Perfectly Competitive Firm Operates in the Short Run