Figure 14-2 Suppose a Firm Operating in a Competitive Market Has the Has

question 70

Multiple Choice

Figure 14-2
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-2. If the market price is Pb, in the short run the firm will earn

• A)positive economic profits.
• B)negative economic profits but will try to remain open.
• C)negative economic profits and will shut down.
• D)zero economic profits.

---

Definitions:

Threatening Impulses

Internal desires or drives that are perceived as dangerous or unacceptable, leading to anxiety or distress.

Defense Mechanism

Psychological strategies employed by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Reaction Formation

A defense mechanism where an individual behaves in a way opposite to their actual feelings or impulses, often to hide those feelings from themselves and others.

Defense Mechanism

Psychological strategies unconsciously used to protect oneself from anxiety arising from unacceptable thoughts or feelings.