{"id":49245,"date":"2024-04-15T22:52:56","date_gmt":"2024-04-15T22:52:56","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=49245"},"modified":"2024-04-15T22:52:56","modified_gmt":"2024-04-15T22:52:56","slug":"assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/","title":{"rendered":"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level."},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a971dbaa66a4\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    Both (A) and (R) are true                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    (A) is true, but (R) is not true                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    (A) is not true, but (R) is true                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Both (A) and (R) are false                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>A. Both (A) and (R) are true.<\/strong><\/p>\n<p>In perfect competition, there are many firms producing identical products, and firms can enter and exit the market freely. This means that firms have no market power and must accept the market price. In the long run, firms will only earn normal profit, which is the minimum amount of profit necessary to keep firms in the market. This is because firms will enter the market if they can earn more than normal profit, and they will exit the market if they are earning less than normal profit.<\/p>\n<p>In the long run, firms will also operate at the minimum average cost level. This is because firms will continue to expand production until their average cost is minimized. This is because firms will always want to produce at the lowest possible cost in order to maximize their profits.<\/p>\n<p>Therefore, both (A) and (R) are true.<\/p>\n<p>Here is <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> a more detailed explanation of each option:<\/p>\n<ul>\n<li>Option A: Both (A) and (R) are true. This is the correct answer. In perfect competition, firms will only earn normal profit in the long run, and they will also operate at the minimum average cost level.<\/li>\n<li>Option B: (A) is true, but (R) is not true. This is not the correct answer. (A) is true because firms will only earn normal profit in the long run. However, (R) is not true because firms will not necessarily operate at the minimum average cost level in the long run. This is because firms may choose to produce at a higher level of output if they believe that they can charge a higher price and still earn a profit.<\/li>\n<li>Option <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> C: (A) is not true, but (R) is true. This is not the correct answer. (A) is true because firms will only earn normal profit in the long run. However, (R) is not true because firms will not necessarily operate at the minimum average cost level in the long run. This is because firms may choose to produce at a higher level of output if they believe that they can charge a higher price and still earn a profit.<\/li>\n<li>Option D: Both (A) and (R) are false. This is not the correct answer. Both (A) and (R) are true.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.\" \/>\n<meta property=\"og:description\" content=\"Join Our Telegram Channel Subscribe on YouTube\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T22:52:56+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/","og_locale":"en_US","og_type":"article","og_title":"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.","og_description":"Join Our Telegram Channel Subscribe on YouTube","og_url":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T22:52:56+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/","url":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/","name":"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-15T22:52:56+00:00","dateModified":"2024-04-15T22:52:56+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/assertion-a-all-firms-under-perfect-competition-in-long-run-earn-only-normal-profit-reason-r-all-firms-under-perfect-competition-in-long-run-operate-at-the-minimum-average-cost-level\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"Economics","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/economics\/"},{"@type":"ListItem","position":4,"name":"Assertion (A) All firms under perfect competition in long run earn only normal profit. Reason (R) All firms under perfect competition in long run operate at the minimum average cost level."}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/49245"}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=49245"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/49245\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=49245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=49245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=49245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}