The Figure Depicts a Firm in a Price-Taker Market

question 134

Multiple Choice

The figure depicts a firm in a price-taker market. Use this figure to answer the following question(s) .
Figure 9-18

Refer to Figure 9-18. Given the current market conditions, in the long run,

• A) new firms will enter the industry and market price will fall.
• B) firms will exit the industry and market price will rise.
• C) firms will neither enter nor exit because the market is in long-run equilibrium.
• D) firms will maintain their current level of economic profit.

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Definitions:

Logarithms

The level to which a base, commonly 10 or e, has to be lifted to yield a particular number.

Expand

To expand an algebraic expression means to multiply it out or remove parentheses, simplifying it to a sum or difference of terms.

Properties

Characteristics or attributes that help define mathematical operations or objects, such as commutative, associative, and distributive properties for addition and multiplication.

Logarithms

The inverse operation to exponentiation, indicating the power to which a base must be raised to obtain a particular number.