A Firm in a Competitive Market Has the Following Cost

question 406

Multiple Choice

A firm in a competitive market has the following cost structure: If the market price is $16,this firm will

• A) produce 4 units of output in the short run and exit in the long run.
• B) produce 5 units of output in the short run and exit in the long run.
• C) produce 5 units of output in the short run and face competition from new market entrants in the long run.
• D) shut down in the short run and exit in the long run.

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Definitions:

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