A Competitive Firm Has a Long-Run Total Cost Function C(y)

question 31

Multiple Choice

A competitive firm has a long-run total cost function c(y) = 2y2 + 288 for y > 0 and c(0) = 0. Its long-run supply function is described as

• A) y =if p > 46, y = 0 if p < 46.
• B) y =if p > 51, y = 0 if p < 54.
• C) y =if p > 48, y = 0 if p < 48.
• D) y =if p > 51, y = 0 if p < 51.
• E) y =if p > 53, y = 0 if p < 43.

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Definitions:

Bargain Purchases

Acquisitions made at a price significantly below the fair market value of the asset, resulting in an immediate gain for the purchaser.

Dividend Capture

A strategy in which an investor purchases securities to own them on the day of record and then quickly sells them; designed to attain dividends but avoid the risk of a lengthy hold.

Securities

Securities that signify ownership in a corporation listed on the stock market, a debt obligation with a government entity or company (bond), or entitlements to ownership through an option.

Day of Record

The date set by a company on which the investors must be on the company's books in order to receive a dividend.