Suppose That for the Individual Firm in a Competitive Market

question 101

Multiple Choice

Suppose that for the individual firm in a competitive market, LRMC = 4Q - 20 and LRAC = 2Q - 20
+ 100/Q. If this is a constant cost industry, then the long- run supply curve will be:

• A)horizontal at P = 8 3.
• B)horizontal at P = 50.
• C)undetermined without knowing the number of firms in the market.
• D)vertical at Q = 5.

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Definitions:

Limits to Rationality

The boundaries within which human reasoning and decision-making effectiveness are constrained, often due to a lack of information or cognitive capabilities.

Risk

The possibility of facing harm or loss when engaging in an activity or making a decision.

Time Pressure

The stress and sensation of urgency induced by the belief that there is not enough time to complete a task or meet a deadline.

Z Problem-Solving Model

A structured approach to address and solve problems by systematically considering various aspects and solutions, ensuring thorough analysis and decision-making.