Competitive firms must maximize profits to survive

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Reference no: EM131704538

True or False? Explain/Illustrate?

a. Having MR=MC is a rule that will maximize profits regardless of whether the firm in question is a competitive firm or a monopolist and this condition is consistent with the rule of setting output to that Q where marginal profit is zero.

b. SAC>SMC implies that (or requires that) MPL<APL.

c. If a competitive firm is not in long-run equilibrium, a movement to a long-run equilibrium will result in a decrease in price both for the firm and the industry.

d. The costs of changing the rate of production are greater in the long-run than in the short-run.

e. The following statement is a similar to a passage found in your text (p.262): "Competitive firms must maximize profits to survive even though in long-run equilibrium profits are zero." Is this an accurate statement?

Reference no: EM131704538

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