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

question 274

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 falls below $4.50, 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 in the short run and shut down.
• D)zero economic profits in the short run.

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Definitions:

Social Comparison

The process whereby people observe the performance of others and use it as a basis for evaluating their own abilities and accomplishments.

Self-Defamation

The act of damaging one's own reputation by speaking or acting in a way that reflects negatively upon oneself.

Self-Enhancing Bias

The motivation to maintain moderately positive beliefs about oneself, which is reflected in a tendency to make comparisons of oneself to people who are similar.

Internalization

is the process by which individuals consciously or unconsciously incorporate the values, attitudes, or norms of others into their own belief system.