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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

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 10SCQ: Explain how the profit-maximizing rule of setting P=MC leads a perfectly competitive market to be...
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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
Transcribed Image Text: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.
Transcribed Image Text: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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