Refer to the Accompanying Figure to Answer the Following Questions

question 155

Multiple Choice

Refer to the accompanying figure to answer the following questions.

-If the price is $3,the firm is making

• A) a loss and will exit the market.
• B) a profit and will exit the market.
• C) a loss and more firms will enter the market.
• D) a profit and more firms will enter the market.
• E) zero profits and the market is at long-run equilibrium.

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Definitions:

General Partners

Individuals in a partnership who are fully involved in its operations and have unlimited liability for its debts and obligations.

Limited Partnership

A business structure where one or more general partners manage the business and are personally liable for business debts, while one or more limited partners contribute capital and have limited liabilities to the extent of their investment.

Sole Proprietor

A business owned and managed by one individual where there is no legal distinction between the owner and the business entity.

Creditor

An individual or entity to whom money or its equivalent is owed by another individual or entity, known as the debtor.