Consider the Following Cost Curves for Firm X,a Perfectly Competitive

question 50

Multiple Choice

Consider the following cost curves for Firm X,a perfectly competitive firm.
FIGURE 9-5
-Refer to Figure 9-5.If Firm X has a capital stock that generates SRATC1,then in the long run Firm X will have to

• A)either expand its plant size or exit from the industry.
• B)set its output at Q1 with the existing plant size.
• C)expand its output to Q2 with the existing plant size.
• D)set its output at Q1 with an expanded plant size.
• E)maintain its output level at Q1,because it is maximizing its short-run profits.

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Definitions:

Nuclear Reactor

A device used to initiate and control a sustained nuclear chain reaction, primarily for the generation of electricity.

Steam Generation

The process of producing steam, typically by boiling water or through the use of heat exchangers.

Fission Products

The atoms, neutrons, and radiation produced by the splitting of a heavy atomic nucleus, such as uranium or plutonium, during nuclear fission, often involving the release of large amounts of energy.

Phosphorescence

The phenomenon of light emission by a substance without combustion or perceptible heat, persisting for some time after excitation by ultraviolet light or other forms of energy.