If the Representative Firm in a Purely Competitive Industry Is

question 60

Multiple Choice

If the representative firm in a purely competitive industry is in short-run equilibrium and, at its current output level, its marginal cost exceeds its average total cost, then we can conclude that

• A) the firm is suffering economic losses.
• B) the firm is not maximizing profits in the short run.
• C) some firms will exit the industry in the long run.
• D) other firms will enter the industry in the long run.

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Definitions:

Chemicals

Substances produced by or used in a chemical process, fundamental components of materials, and products across various industries.

Autos

Short for automobiles, referring to motor vehicles designed for passenger transportation.

Capital-Intensive

A capital-intensive process or business requires a high initial investment in machinery, equipment, or infrastructure relative to labor to produce goods or services.

Sunflower Seeds

Edible seeds from the sunflower plant, often eaten as a snack, used in recipes, or processed for their oil.