The First Table Shows Cost Data for a Single Firm

question 134

Multiple Choice

The first table shows cost data for a single firm. Now suppose that there are 600 identical firms in this industry, each with the same cost data. Suppose, too, that the demand curve for this industry is as shown in the second table. At equilibrium, each firm will realize

• A)an economic profit of $155.
• B)an economic profit of $35.
• C)a loss of $45.
• D)a loss of $135.

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Definitions:

Import or Export

The practice of buying goods or services from foreign suppliers (importing) or selling goods or services to foreign buyers (exporting).

World Price

The cost of a product or service in the international marketplace, dictated by supply and demand across the globe.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, usually due to market prices.