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:

Retarding Spoilage

Methods or techniques used to slow down the deterioration of food or other perishable goods.

Additives

Substances added to something in small quantities to improve or preserve it, commonly used in context with food, fuel, or materials.

Matched Pairs

Matched pairs are a research design in which pairs of subjects are closely matched on key characteristics, with one subject in each pair receiving the treatment and the other serving as a control.

Population Variances

A measure of spread within a distribution or how much the members of the population differ from the population mean.