Use the Figure Below to Answer the Following Question

question 43

Multiple Choice

Use the figure below to answer the following question.

Figure 12.4.4
-Refer to Figure 12.4.4, which shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price is $16 per unit,

• A)the market is in long-run equilibrium.
• B)in the long run, firms will leave this market.
• C)in the long run, the price will fall as new firms enter the market.
• D)the firm is making zero economic profit.
• E)none of the above

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Definitions:

Sales Decrease

A reduction in the amount of products or services sold by a business over a given period.

Full Capacity

The highest amount of products or services a business can consistently generate during a specific timeframe under standard conditions.

Fixed Assets

Long-term tangible assets used in the operation of a business, not expected to be converted to cash within a year.

Sales Growth

The increase in sales over a specific period, reflecting a company's ability to grow revenue through marketing, expansion, and new product introductions.