-The Figure Above Shows Short-Run Cost Curves for a Perfectly

question 333

Multiple Choice

-The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is $8 and the firm does NOT shut down, the firm's output in the short run

• A) will be 0.
• B) will be between 0 and 10.
• C) will be 10 or higher.
• D) cannot be determined without more information.

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Definitions:

Willingness To Pay

This is the maximum amount a consumer is prepared to spend on a good or service, reflecting the value the consumer places on it.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale.

Consumer Surplus

The imbalance between the funds consumers are willing to dedicate to a good or service and the funds they actually dedicate.