Suppose a Perfectly Competitive Firm,which Is Initially in Long-Run Equilibrium

question 104

Multiple Choice

Suppose a perfectly competitive firm,which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees.In the short run,which of the following will occur?

• A)ATC will shift up and MC will shift down, causing the firm to incur a loss.
• B)ATC will shift down and MC will shift up, causing the firm to earn a positive economic profit.
• C)ATC and MC will shift down, causing the firm to earn a positive economic profit.
• D)ATC and MC will shift up, causing the firm to incur a loss.

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Definitions:

Gestation

The process or period of developing inside the womb between conception and birth.

Anoxia

A condition characterized by an absence of oxygen supply to an organ's tissues, leading to potential damage or death of the tissue.

Fetal Monitoring

A medical procedure during pregnancy or labor that uses special equipment to check the heart rate of the fetus and other vital signs to ensure its health.

Preterm

Born at or before completion of 37 weeks of gestation.