Suppose Your Trucking Firm in a Perfectly Competitive Industry Is

question 25

Multiple Choice

Suppose your trucking firm in a perfectly competitive industry is making zero economic profits in the short run. The federal government imposes a new safety regulation that affects all firms, thus shifting the marginal cost curve upward. As a result your firm's profit maximizing short- run output will

• A) increase as price rises in the long run.
• B) decrease because the new MC curve will intersect the horizontal demand curve at a lower rate of output.
• C) remain the same because you will pass on the extra costs to the consumers.
• D) increase as firms will leave the industry at the higher costs, thus driving up the market price.
• E) remain the same since the new regulation does not affect ATC.

---

Definitions:

Niche Market

A specific, focused segment of the market that is addressed by tailoring products or services to fit its particular needs.

Social Networking Sites

Online platforms that enable users to create profiles, connect with friends and family, and share content or interests.

Media Multiplexity

Media Multiplexity theory suggests that strong relationships tend to use a wider range of communication media to maintain their bond, integrating both traditional and digital forms of communication.

Communication Flows

The paths along which information is transmitted within an organization or between individuals and entities.