The Figure Below Depicts the Short-Run Market Equilibrium in a Perfectly

question 146

Multiple Choice

The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves. In the long run equilibrium in this market:

• A)price will equal $5, and there will be 20 firms in the industry.
• B)price will equal $5, and there will be 10 firms in the industry.
• C)price will equal $8, and there will be 20 firms in the industry.
• D)price will equal $5 and total output will equal 500 units, but there is not enough information to determine how many firms will be in the industry.

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Definitions:

Customer's Specifications

Detailed requirements and criteria provided by a customer regarding the design, functionality, or construction of a product or service.

Production Day

A day scheduled for the manufacture or creation of goods within an industrial or production setting.

Nonconforming Transistors

Transistors that do not meet the predefined standards or specifications.

Electronics Company

A business involved in the manufacturing, design, development, or selling of electronic devices and components.