Consider the Following Cost Curves for Two Perfectly Competitive Firms,A

question 37

Multiple Choice

Consider the following cost curves for two perfectly competitive firms,A and B. FIGURE 9-3
-Refer to Figure 9-3.Firms A and B are in the same industry.Choose the statement that best describes the situation facing the two firms.

• A)Firm A is suffering losses and will be shut down immediately; Firm B will be shut down if the price falls any further.
• B)Firm A is making losses but remains producing as long as price falls no further; Firm B is producing at lower cost and is earning economic profits.
• C)Firm A and Firm B are both earning positive economic profits; new firms will likely enter the industry.
• D)Firm A and Firm B are both suffering economic losses and will soon exit the industry.

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Definitions:

Environmental Influences

Environmental influences involve external factors and conditions that impact an individual's physical, psychological, and social development.

Sensitive Period

A point in development when organisms are particularly susceptible to certain kinds of stimuli in their environments, but the absence of those stimuli does not always produce irreversible consequences.

Synaptic Pruning

The process during brain development where extra neurons and synaptic connections are eliminated to increase the efficiency of neuronal transmissions.

Neurons

Specialized cells of the nervous system that transmit signals throughout the body; key components in the function of the brain, spinal cord, and peripheral nerves.