Figure 13-1 Suppose That a Firm in a Competitive Market Has the Has

question 174

Multiple Choice

Figure 13-1
Suppose that a firm in a competitive market has the following cost curves:
-Refer to Figure 13-1.If the market price is $5.00,the firm will earn

• A) positive economic profits in the short run.
• B) negative economic profits in the short run but remain in business.
• C) negative economic profits and shut down.
• D) zero economic profits in the short run.

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Definitions:

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in like circumstances, resulting in harm or damage to another.

Legislation

The process of making or enacting laws; it also refers to the laws themselves that have been created through this process.

Unlimited Joint Liability

A legal obligation among partners that holds each personally responsible for the total debts of a partnership without limits.