The Figure Below Shows the Supply and the Demand for a Good

question 150

Multiple Choice

The figure below shows the supply and the demand for a good (left) and the cost curves of an individual firm in this market (right) . Assume that all firms in this market, including the potential entrants, have identical cost curves. Initially, the market is in equilibrium at point A.

-Refer to the figure above.Suppose that new firms enter the market and the quantity supplied increases by 8 units at each price.Then at the new equilibrium,each firm in the market earns ________ and there will be ________.

• A) positive economic profit; entries of new firms
• B) negative economic profit; exit of existing firms
• C) zero economic profit; neither entry nor exit of firms
• D) zero accounting profit; both entry and exit of firms

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Definitions:

Glottis

The opening between the vocal cords.

Pleura

The thin membrane that covers the lungs and lines the chest cavity, facilitating smooth respiratory movements.

Alveoli

Tiny air sacs in the lungs where the exchange of oxygen and carbon dioxide takes place.

Pharynx

A part of the neck and throat situated behind the mouth and nasal cavity, crucial for respiratory and digestive pathways.