18 In a perfectly competitive market, which two conditions must be met to achieve long-run equilibrium?AProductive efficiency and low average costsBOZero economic profits and zero accounting profitsAllocative efficiency and profit maximizationDOProductive efficiency and allocative efficiency 19 Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers,cooks, electricity, food, etc. average out to be $3.95 per meal. Her costs for rent, insurance, cleaningsupplies, and business license average out to be $1.25 per meal. Because the market is highly competitive,Kate should do which of the following?ARaise her prices above the perfectly competitive level set by the market.BOKeep the business open in the short run, but plan to go out of business in the long run.Lay-off her staff, break her lease, and close the business down immediately.DOKeep the business open in the short run, and plan to expand the business in the long run.

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In a perfectly competitive market, which two conditions must be met to achieve long-run equilibrium? A Productive efficiency and low average costs BO Zero economic profits and zero accounting profits CO Allocative efficiency and profit maximization DO Productive efficiency and allocative efficiency

In a perfectly competitive market, which two conditions must be met to achieve long-run equilibrium? A Productive efficiency and low average costs BO Zero economic profits and zero accounting profits CO Allocative efficiency and profit maximization DO Productive efficiency and allocative efficiency

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

18 In a perfectly competitive market, which two conditions must be met to achieve long-run equilibrium?
A
Productive efficiency and low average costs
BO
Zero economic profits and zero accounting profits
Allocative efficiency and profit maximization
DO
Productive efficiency and allocative efficiency

19 Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers,
cooks, electricity, food, etc. average out to be $3.95 per meal. Her costs for rent, insurance, cleaning
supplies, and business license average out to be $1.25 per meal. Because the market is highly competitive,
Kate should do which of the following?
A
Raise her prices above the perfectly competitive level set by the market.
BO
Keep the business open in the short run, but plan to go out of business in the long run.
Lay-off her staff, break her lease, and close the business down immediately.
DO
Keep the business open in the short run, and plan to expand the business in the long run.

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