Suppose a Profit-Maximizing Firm in a Competitive Market Produces Rubber

question 18

Multiple Choice

Suppose a profit-maximizing firm in a competitive market produces rubber bands. When the market price for rubber bands rises above the minimum of its average variable cost, but still lies below the minimum of average total cost, in the short run the firm will

• A)experience losses but will continue to produce rubber bands.
• B)shut down.
• C)earn both economic and accounting profits.
• D)raise the price of its product.

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Definitions:

Richter Magnitude

The Richter magnitude scale is a numeric scale used to express the energy released by an earthquake, with each whole number representing a tenfold increase in measured amplitude.

P-Waves

Primary waves, or compressional waves, are the fastest seismic waves and can travel through both solid and liquid layers of the Earth.

S-Waves

Secondary waves, or shear waves, are a type of seismic waves that move the ground perpendicular to the direction of wave propagation.

Computerized Warning System

An automated system designed to provide timely alerts about natural disasters, such as hurricanes, tsunamis, and earthquakes, using data analysis and sensors.