The Speedy Typesetting Company, a Perfectly Competitive Firm, Is Currently

question 209

Multiple Choice

The Speedy Typesetting Company, a perfectly competitive firm, is currently producing where P = MC and is earning a normal profit. The firm mainly employs minimum wage workers and the government just increased the minimum wage from $7.25 to $9.55 per hour. In the short run, this firm will most likely

• A) reduce the amount of output it produces because its cost curves have shifted up and to the left.
• B) continue to produce the same amount of output because only its fixed costs have increased.
• C) produce more units of output to increase revenue to cover the additional fixed costs.
• D) shut down because it will no longer be earning a normal profit.

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Definitions:

Termination Step

The final step in a chain reaction mechanism in which reactive intermediates combine or react with the wall of the container, ending the reactive sequence.

Free Radical

Highly reactive atoms or molecules that contain unpaired electrons and can participate in chain reactions.

Chlorination

The addition of chlorine to water or organic compounds, either as a disinfectant or to introduce chlorine atoms into molecules during chemical synthesis.

Methane

A colorless, odorless gas, the simplest alkane and the main component of natural gas; used as a fuel and in organic synthesis.