Figure 13-2 Suppose a Firm Operating in a Competitive Market Has the Has

question 360

Multiple Choice

Figure 13-2
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 13-2.If the market price is P1,in the short run the firm will earn

• A) positive economic profits.
• B) negative economic profits but will try to remain open.
• C) negative economic profits and will shut down.
• D) zero economic profits.

---

Definitions:

Production Technology

The set of processes, methods, or equipment used by firms in the production of goods or services, which affects productivity and efficiency.

Input Prices

The cost of raw materials and other inputs used in the production of goods and services. Lower input prices can increase profitability for producers.

Production Technology

The methods, processes, and equipment used to produce goods and services.

Input Prices

The costs associated with the inputs required for production, including materials, labor, and overhead expenses.