Figure 9-17 the Graphs in Figure 9-17 Represent the Perfectly

question 135

Multiple Choice

Figure 9-17
The graphs in Figure 9-17 represent the perfectly competitive market demand and supply curves for the apple industry and demand and cost curves for a typical firm in the industry.
-Refer to Figure 9-17.Which of the following statements is true?

• A) The current market price is $3 but the firm will be able to increase the price in the future.
• B) The current market price is $3 but the price will fall in the long run as a result of a decrease in demand.
• C) The current market price is $3 but the price will fall in the long run as new firms enter the market.
• D) The current market price is $3 but the price will increase in the future as the market demand increases.

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Definitions:

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values around the mean.

Capital Cost Allowance (CCA)

A tax deduction in certain jurisdictions for depreciation of property used in a business or for earning income.

Operating Cash Flow

The cash an organization generates from its normal business operations, indicating its ability to generate sufficient positive cash flow to maintain and grow its operations.

Interest Expense

Cost incurred by an entity for borrowed funds, which may include payments on loans, bonds, and lines of credit.