Figure 16-3 -Refer to Figure 16-3. Which of the Following Will Occur

question 53

Multiple Choice

Figure 16-3
-Refer to Figure 16-3. Which of the following will occur in the long run in this industry?

• A)Firms will exit this industry.
• B)Firms will enter this industry.
• C)This firm will continue to earn positive economic profits.
• D)This firm will incur losses.

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Definitions:

Prices

The amount of money required to purchase a good or service, reflecting the value placed on it by the market.

MU/P

The ratio of marginal utility (MU) to price (P), representing the additional satisfaction gained per unit of currency spent.

Less Of

A comparative term indicating a reduced quantity or degree of something.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service.