Figure 13-13 -Refer to Figure 13-13.If the Diagram Represents a Typical Firm

question 23

Multiple Choice

Figure 13-13

-Refer to Figure 13-13.If the diagram represents a typical firm in the market, what is likely to happen in the long run?

• A)Some firms will exit the market causing the demand to increase for firms remaining in the market.
• B)New firms will enter the market causing the demand to decrease for existing firms.
• C)Inefficient firms will exit the market and new cost-efficient firms will enter the market.
• D)Competition will be intensified as firms strive to make long-run profits.

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Definitions:

Depreciated

The process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Appraised Value

An estimation of the fair market value of an asset or property, typically determined by a professional appraiser.

Boot

Additional value or cash that balances the value of the assets being traded in a barter or exchange transaction.

Fair Market Value

Fair Market Value is the estimated price at which an asset would change hands between a willing buyer and seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts.