Suppose a Firm Operates in the Short Run at a Price

question 208

Multiple Choice

Suppose a firm operates in the short run at a price above its average total cost of production. In the long run the firm should expect

• A)new firms to enter the market.
• B)the market price to fall.
• C)its profits to fall.
• D)All of the above are correct.

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Definitions:

Metabolism

The sum of all chemical processes that occur within a living organism to maintain life, including anabolism and catabolism.

Hypothalamohypophysial

Pertaining to the relationship or connection between the hypothalamus and the pituitary gland, crucial for hormonal regulation.

Secondary Capillary

A term not commonly used in isolation to describe a specific type of capillary; generally, capillaries are the small blood vessels where gas and nutrient exchange occur.

Primary Capillary

The initial segment of the microcirculation system where exchange of gases, nutrients, and waste products occurs.