Asked by Alexandra Matusiak on Mar 10, 2024
Verified
An industry is in ________ if firms have no incentive to enter or exit in the ________ run.
A) disequilibrium; short
B) disequilibrium; long
C) equilibrium; short
D) equilibrium; long
Equilibrium
The condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is no tendency for price to change.
Incentive
A factor, often financial, that motivates individuals or organizations to perform certain actions or behave in a desired way.
Long Run
A period in economics sufficient for all adjustments to be made, including physical capital and not just prices.
- Comprehend the fundamentals of long-run equilibrium within perfectly competitive markets.
Verified Answer
KK
Katie KirkpatrickMar 10, 2024
Final Answer :
D
Explanation :
In economic terms, an industry is in equilibrium in the long run when firms have no incentive to enter or exit the market, indicating that all firms are making normal profits and the market supply meets the market demand at the prevailing price.
Learning Objectives
- Comprehend the fundamentals of long-run equilibrium within perfectly competitive markets.