A five-firm concentration ratio assesses firms’ sizes with reference to the number of employees, and shows the percentage of total employment in an industry accounted for by the five firms with the most employees

The firms in an industry with a high concentration ratio may, nevertheless, find themselves in a highly competitive environment

Economic profits in a contestable market attract new entrants

In deciding whether to produce inputs or buy them, firms take account of transactions costs

A firm might quote its short-run costs as the costs of producing different output levels over a period of a month

A firm might quote its long-run costs as the costs of producing different output levels over a period of an hour

A firm might quote both its short-run costs and its long-run costs as the costs of producing different output levels over a period of a week

Short-run costs are always lower than long-run costs

It might set its daily output at a higher level in the short run than in the long run

It might set its daily output at a lower level in the short run than in the long run

If it had a daily output of zero in the short run, it would be sure to have a total cost of zero

If it had a daily output of zero in the long run, it would be sure to have a total cost of zero

Its price is fixed

The quantity of it that a firm can use in the long run is fixed

The quantity of it that a firm can use in the short run is fixed

The quantity of output that the firm can produce with it is fixed

Average fixed cost

Average variable cost

Short-run average cost

Short-run marginal cost