Which of the following statements is not correct about competitive firms?
A)In a long-run equilibrium, firms must be operating at their efficient scale.
B)In the short run, the number of firms in an industry may be fixed.
C)In the long run, the number of firms can adjust to changing market conditions.
D)In the short run, firms must be operating at a level of output where price equals average variable cost.

Question

Quizplus · Accepted Answer

In the short run, firms may choose to operate at a level of output where price is less than average variable cost, as long as they are able to cover their variable costs and contribute towards their fixed costs.

Which of the Following Statements Is Not Correct About Competitive