Suppose a Typical Firm in a Competitive Industry Has the Following

question 10

Multiple Choice

Suppose a typical firm in a competitive industry has the following data in the short run: price = $5000; output = 1 million units; ATC = $5300; AVC = $4750.What will likely happen in the long run?

• A)In the long run the industry will expand because firms are earning economic profits.
• B)In the long run the industry will contract because firms are suffering losses.
• C)The size of the industry will remain the same in the long run.
• D)Consumers will avoid this industry because firms are suffering losses.
• E)There is not enough information to formulate an answer.

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Definitions:

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives.

Role Ambiguity

A situation in which an individual's role within an organization is unclear, leading to confusion and potentially stress.

Job Demands

The physical, psychological, social, or organizational aspects of a job that require sustained physical and/or psychological effort or skills and are therefore associated with certain physiological and/or psychological costs.

Social Relations

The networks and interactions between individuals or groups, including social structures, institutions, and societal norms.