Which of the following distinguishes the short run from the long run in pure competition?
A) Firms can enter and exit the market in the long run but not in the short run.
B) Firms attempt to maximize profits in the long run but not in the short run.
C) Firms use the MR = MC rule to maximize profits in the short run but not in the long run.
D) The quantity of labor hired can vary in the long run but not in the short run.

Question

Quizplus · Accepted Answer

In pure competition, firms can enter and exit the market in the long run to achieve normal profits. However, in the short run, firms cannot enter or exit the market as easily, which affects the market price and profits. This difference distinguishes the short run from the long run in pure competition. Therefore, option A is the best choice. Option B is incorrect because firms attempt to maximize profits in both the short run and the long run. Option C is incorrect because firms use the MR = MC rule to maximize profits in both the short run and the long run. Option D is incorrect because the quantity of labor hired can vary in both the short run and the long run in pure competition.

Which of the Following Distinguishes the Short Run from the Long