In Figure 23

question 125

Multiple Choice

In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: If the market demand curve is D₂ in Figure 23.3, then in the long run,

• A) Economic profit is less than zero, and firms will exit.
• B) Economic profit is greater than zero, and firms will expand production.
• C) There are zero economic profits, so there will be no entry or exit.
• D) There are zero economic profits, so firms will exit.

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Definitions:

Dividends Per Share

The amount of declared dividend for the year divided by the number of outstanding shares of the company's stock.

Common Stockholders

Individuals or entities that own shares of common stock in a company, granting them the right to vote at shareholder meetings and receive dividends.

Earnings Distribution

It is the way in which a company allocates its earnings among shareholders, reinvestment into the business, or other financial obligations.

Horizontal Analysis

This is a financial analysis method that compares historical financial information over a series of reporting periods to identify trends and growth patterns.