Suppose a Firm Operates in the Short Run at a Price

question 32

Multiple Choice

Suppose a firm operates in the short run at a price above its average total cost of production. In the long run the firm should expect

• A)new firms to enter the market.
• B)the market price to rise.
• C)its profits to rise.
• D)Both b and c are correct.

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Definitions:

Partially Digest

Partially digest describes a process where food is incompletely broken down by enzymes, typically occurring in the digestive system before nutrients are absorbed.

Microvilli

Minute, finger-like projections of the cell membrane that increase surface area for absorption, especially in the lining of the intestinal tract.

Small Intestine

A part of the gastrointestinal tract where most of the digestion and absorption of nutrients occurs, extending from the stomach to the large intestine.

Anorexia Nervosa

Eating disorder characterized by a severe psychological fear of gaining weight.