Figure 14-4 Suppose a Firm Operating in a Competitive Market Has the Has

question 265

Multiple Choice

Figure 14-4
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-4. When price falls from P3 to P1, the firm finds that it

• A)decreases its fixed costs.
• B)should produce Q1 units of output.
• C)should produce Q3 units of output.
• D)should shut down immediately.

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Definitions:

Berlin Wall

A concrete barrier that physically and ideologically divided Berlin from 1961 to 1989, symbolizing the Cold War division between East and West.

Khrushchev

Nikita Khrushchev, a Soviet statesman who led the Soviet Union during part of the Cold War as the First Secretary of the Communist Party and as Premier.

East Berlin

The capital city of East Germany during the Cold War, characterized by the Berlin Wall dividing it from West Berlin and symbolizing the ideological divide between communism and capitalist democracy.