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.

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Definitions:

Disjunctive Syllogism (DS)

A form of logical argument where, if one has a disjunction (A or B) and knows that A is not true, one can conclude B must be true.

Implication (Imp)

A logical relationship where if the first statement (antecedent) is true, then the second statement (consequent) must also be true.

Quantifier Negation

In logic, the process of negating a quantified statement, which can change the original scope and meaning of the statement.

Universal Generalization

A logical operation that asserts that a property or relation holds for all members of a certain category.