Refer to the Graphs Shown, Which Depict a Perfectly Competitive

question 81

Multiple Choice

Refer to the graphs shown, which depict a perfectly competitive market and firm. If market demand is D₀:

• A)this market is in long-run equilibrium because the firm is earning positive economic profit.
• B)this market is in long-run equilibrium because the firm is earning zero economic profit.
• C)this market is in short-run equilibrium but not long-run equilibrium.
• D)the firm will raise the price above P₀ to increase profit.

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Definitions:

Burned Intake Valve

A valve in the engine that has been damaged by excessive heat, leading to loss of efficiency or engine failure.

Power Balance Test

A test used to determine if each cylinder is contributing power to overall engine output. During the test, fuel injectors are disabled and the change in engine rpm is recorded. If a cylinder is not producing power, there will not be an rpm drop when that cylinder’s injector is disabled, alerting you to the problem cylinder.

Engine Output

The amount of power produced by an engine, typically measured in horsepower or kilowatts.

Compression Test

A diagnostic tool used to measure the amount of pressure that an engine's cylinders can generate, indicating the health of the engine's internal components.