Which of the following does not characterize long-run equilibrium?
A) No individual firm wishes to change the amount of the good it is supplying to the market
B) At least one firm in the market has an incentive to change the amount of one of the inputs it is using
C) The aggregate supply in the market equals the aggregate demand for the good

Question

Quizplus · Accepted Answer

In long-run equilibrium, all firms in the market are producing at their efficient scale and earning zero economic profit. Therefore, no individual firm wishes to change the amount of the good it is supplying to the market. The aggregate supply in the market equals the aggregate demand for the good, and there is no incentive for firms to enter or exit the market. However, there may be changes in the price of inputs or improvements in technology that could incentivize a firm to change the amount of one of the inputs it is using. Therefore, choice B does not characterize long-run equilibrium.

Which of the Following Does Not Characterize Long-Run Equilibrium