If the Market Price in a Price-Taking Industry Was Currently

question 95

Multiple Choice

If the market price in a price-taking industry was currently above the average total cost of production for firms in the industry,

• A) firms in the industry would earn short-run economic profits that would be offset by long-run economic losses.
• B) new firms would enter the industry, which would drive price down to the average total cost of production in the long run.
• C) firms in the industry would earn positive economic profits in the long run.
• D) most firms in the industry would shut down in the long run.

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Definitions:

Fear

An emotional response to perceived dangers or threats, leading to physiological and behavioral changes aimed at avoiding those threats.

Basic Emotions

Fundamental emotions that are universally recognized and experienced by humans, such as happiness, sadness, fear, disgust, surprise, and anger.

Facial Expressions

Visible changes in the face that convey an individual's emotional state or reactions to various situations.

Neurotransmitter

Chemical substances in the brain that transmit signals from one neuron to another, playing key roles in mood, cognition, and behavior.