Figure 14-13 Suppose a Firm in a Competitive Industry Has the Following

question 519

Multiple Choice

Figure 14-13
Suppose a firm in a competitive industry has the following cost curves:
-Refer to Figure 14-13. If the price is $2 in the short run, what will happen in the long run?

• A)Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.
• B)Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry.
• C)Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry.
• D)Because the price is below the firm's average variable costs, the firms will shut down.

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Definitions:

Convicted Rapists

Individuals who have been found guilty by a court of law for committing the crime of rape.

Largely Ignored

Refers to something that receives little to no attention or consideration, often despite its importance or significance.

Aggravated Rape

A form of rape that involves one or more aggravating factors, such as physical injury to the victim, the use of a weapon, or the occurrence of the crime within a particularly heinous context.

Real Rape

A term critiquing societal perceptions, highlighting that only violent, stranger-perpetrated assaults are seen as true instances of rape, neglecting other forms of sexual violence.