Refer to the Accompanying Figure to Answer the Following Questions

question 155

Multiple Choice

Refer to the accompanying figure to answer the following questions.

-If the price is $3,the firm is making

• A) a loss and will exit the market.
• B) a profit and will exit the market.
• C) a loss and more firms will enter the market.
• D) a profit and more firms will enter the market.
• E) zero profits and the market is at long-run equilibrium.

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Definitions:

Correspondence Theory

A theory in epistemology and philosophy of truth stating that the accuracy of a statement is determined by how accurately it corresponds to the real world or facts.

Rationality

The quality of being based on or in accordance with reason or logic, often applied to thought processes and decision-making.

True Beliefs

Convictions or acceptances that are in accordance with reality or facts.

Coherent

The quality of being logical and consistent.