Assume That All Firms in This Industry Have Identical Cost

question 159

Multiple Choice

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. If the market supply curve is given by S3, then we would expect firms to:

• A)exit the market in the long run.
• B)enter the market in the long run.
• C)neither exit nor enter the market in the long run.
• D)shut down in the short run.

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Definitions:

Bird Sanctuary

A designated area that provides habitat and protection for bird species to live and breed, often to conserve endangered species.

Conservation

The planned management of a natural resource to prevent exploitation, destruction, or neglect, ensuring its sustainability for future generations.

Resource Removal

The extraction of natural resources from the environment for human use, such as mining, logging, or fishing.

Economic Growth

An increase in the production of goods and services in an economy over a period, often measured by the rise in the real GDP.