Consider the Following Cost Curves for Firm X,a Perfectly Competitive

question 145

Multiple Choice

Consider the following cost curves for Firm X,a perfectly competitive firm. FIGURE 9-5
-Refer to Figure 9-5.At output Q₂ and price P₂,which of the following is FALSE?

• A)There are economic profits to attract new entrants.
• B)The firm producing Q₂ is at its long-run profit-maximizing position.
• C)P = MC = SRATC = LRAC.
• D)There are no unexploited internal economies of scale.
• E)Firm X is producing at its minimum efficient scale.

---

Definitions:

Acquiring Firms

Companies that purchase a majority stake in another company to assume control of its operations and resources.

Acquisition

The process by which one company takes over another and becomes the new owner.

Synergy Value

The additional value created by combining two companies, often expected from efficiencies or enhanced market power.

Cash Deal

A business transaction where payment is made in full using cash at the time of the transaction.