Figure 14-1 Suppose That a Firm in a Competitive Market Has the Has

question 457

Multiple Choice

Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
-Refer to Figure 14-1. If the market price is $6.30, the firm will earn

• A)positive economic profits in the short run.
• B)negative economic profits in the short run but remain in business.
• C)negative economic profits and shut down.
• D)zero economic profits in the short run.

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Definitions:

Output

The total amount of goods or services produced by a firm or economy.

Declines

Refers to a decrease in the value, amount, or quality of something, often observed in economic indicators or market trends.

Positive Slope

In mathematics, a line on a graph that shows a relationship where as one variable increases, so does the other.

Increasing

describes a situation or process where there is a growth or addition in quantity, size, number, or extent.