A Firm Is Earning an Economic Profit

question 216

Multiple Choice

A firm is earning an economic profit. In the short run the firm should ________. In the long run the firm should probably ________.

• A) shut down; expand
• B) produce where MC = MR; leave the industry
• C) produce where MC = MR; expand
• D) shut down; exit the industry

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Definitions:

Washing Detergent

A chemical substance used to break up and remove dirt and grease from fabrics, commonly in the form of powder or liquid.

Calcium Nitrate

An inorganic compound used as a nitrogen fertilizer in agriculture and also in waste water pre-conditioning for odor emission prevention.

Atoms

The basic units of matter, consisting of a nucleus surrounded by electrons.

Nitrogen

A colorless, odorless, nonmetallic element that makes up about 78% of the Earth's atmosphere and is a constituent of all living tissues.