-The Above Figure Shows Three Possible Average Total Cost Curves

question 68

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 ATC₀, each produces 20 units, and the market price of the good is $16 per unit, then

• A)the firms make an economic profit of $8 per unit.
• B)firms will enter the industry and the number of firms increases.
• C)the firms' ATC curves will eventually shift to become the same as ATC₁.
• D)firms will exit the industry and the number of firms decreases.
• E)Both answer A and answer B are correct.

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Definitions:

Food Consumed

The types and amounts of food ingested by an organism or individual.

Independent Variable

An independent variable is a factor or condition that is intentionally changed by the researcher to observe its effects on a dependent variable in an experiment.

Experimenter

An individual who conducts research or experiments, typically in a scientific context, to test hypotheses and draw conclusions.

Manipulated

In experimental research, refers to the intentional changing or altering of the independent variable to observe its effect on the dependent variable.