-The Above Figure Shows Three Possible Average Total Cost Curves

question 255

Multiple Choice

-The above figure shows three possible average total cost curves.If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC?,each produce 30 units,and the market price of the good is $16 per unit,then the firms

• A) make zero economic profit and firms neither enter nor exit the industry.
• B) make zero economic profit and so some firms exit the industry.
• C) incur an economic loss and so some firms exit the industry.
• D) incur an economic loss and so new firms enter the industry.
• E) make an economic profit and new firms enter the industry.

---

Definitions:

Speed Increasing

The process of accelerating or increasing the rate of motion or activity.

Transmission Tailshaft

The rear section of a vehicle's transmission, connecting to the driveshaft, that transfers power from the transmission to the wheels.

Mating Gear

Refers to a gear that engages with another gear to transmit force and motion in mechanical systems.

Climbing

A gear problem caused by excessive wear in intermeshing gears or bearings. Climbing occurs when intermeshing gears move apart sufficiently for one gear to climb over the apex of its mate.