The Figure Depicts a Firm in a Price-Taker Market

question 14

Multiple Choice

The figure depicts a firm in a price-taker market. Use this figure to answer the following question(s) .
Figure 9-19

Refer to Figure 9-19. 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 continue to suffer economic losses.

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Definitions:

Rack And Pinion

A type of linear actuator that involves a circular gear (the pinion) engaging a linear gear (the rack) to create linear motion from rotational motion.

Fifth Wheel

A pivoting platform attached to a tractor or truck chassis that provides a coupling point for a semi-trailer.

Axle

A rod or bar on which wheels turn or the housing that supports wheel assemblies. Also used to describe the shaft that transmits drive torque to the drive wheels.

Drivelines

Components, including the driveshaft, axles, CV joints, and differential, that transmit power from the engine to the wheels of a vehicle.