Good W Is Produced in a Competitive Industry with Increasing

question 52

Multiple Choice

Good W is produced in a competitive industry with increasing costs of production.The figure below shows how a typical firm's long-run average cost curve shifts upward as industry output of good W expands.With 50 firms in the industry,each firm faces an identical long-run average cost curve given by LAC.With 80 firms in the industry,each firm faces an identical long-run average cost curve given by LAC'.And with 120 firms in the industry,each firm faces an identical long-run average cost curve given by LAC''. When there are 80 firms in the industry in long-run competitive equilibrium,the long-run average cost (LAC) of producing good W is $_________,and each firm earns $__________ of economic profit.

• A)$0; $0
• B)$10; $0
• C)$10; $10,000
• D)96,000; $16
• E)none of the above

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Definitions:

Binocular Cue

Visual information taken from both eyes that enables perception of depth, distance, and 3D structure of objects.

Convergence

The process or state of different elements coming together or merging towards a unified or common point.

Retinal Disparity

The slight difference in the visual images that each eye perceives because of the different angles in which each eye views the world.

Basilar Membrane

A critical structure in the inner ear, part of the cochlea, that plays a key role in sound perception by vibrating in response to different frequencies.