A Firm in a Competitive Market Has the Following Cost

question 147

Multiple Choice

A firm in a competitive market has the following cost structure:

If the market price is $4,this firm will

• A) produce two units in the short run and exit in the long run.
• B) produce three units in the short run and exit in the long run.
• C) produce four units in the short run and exit in the long run.
• D) shut down in the short run and exit in the long run.

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Definitions:

Reasonable Means

Methods or actions that are considered sensible and practical under the circumstances for achieving a certain goal.

Breaches its Lease

Occurs when one party fails to fulfill their contractual obligations under the terms of a lease agreement.

Premises

A building or land specified in a legal document or agreement, often related to business or residency.

Penalize

To subject an individual or entity to a disadvantage or punishment for violations of laws, rules, or contracts.