Which of the following is true in the long run for both monopoly and perfectly competitive industries?
A)There are low barriers to entry.
B)Firms can earn positive economic profits in the long run.
C)Firms produce at levels that are economically efficient.
D)Firms will go out of business if they cannot charge a price that is at least equal to average total cost.

Question

Quizplus · Accepted Answer

In the long run, firms in both monopoly and perfectly competitive industries must cover their average total costs to remain in business. If they cannot charge a price that covers these costs, they will eventually exit the market.

Which of the Following Is True in the Long Run