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

question 294

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 P3,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:

Middle-income Households

Families or living units with a total income that falls in the middle of a nation's income distribution, neither rich nor poor.

Purchasing Power

Purchasing power denotes the quantity of goods or services that can be bought with a specific amount of money, reflecting the value of currency.

Economic Infrastructure

The underlying physical and organizational structures needed for the operation of a society or enterprise, such as transportation and communication systems.

Distribution Systems

Networks that a company uses to get its products from the manufacturer to the end consumer.