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:

Dynamic Initialization

The process of assigning a value to a variable at runtime rather than at compile time.

Compile-Time

The phase in software development when source code is transformed into executable code by a compiler, before the program is run.

Declaration Statement

In programming, a declaration that introduces a new variable or function by defining its type and, if chosen, initializing it.

Run-Time

The period during which a computer program is executing, after compilation.