In a Competitive Market the Current Price Is $5

question 419

Multiple Choice

In a competitive market the current price is $5. The typical firm in the market has ATC = $5.50 and AVC = $5.15.

• A)In the short run firms will shut down, and in the long run firms will leave the market.
• B)In the short run firms will continue to operate, but in the long run firms will leave the market.
• C)New firms will likely enter this market to capture any remaining economic profits.
• D)The firm will earn zero profits in both the short run and long run.

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Definitions:

Total Resistance

Refers to the cumulative resistance within an electric circuit, affecting the overall current flow.

Series RC

A circuit configuration consisting of a resistor (R) and capacitor (C) connected end-to-end or in series with each other, affecting the circuit's overall impedance.

Voltage Drop

The reduction in voltage across components in an electrical circuit, caused by the impedance or resistance of the components.

Capacitive Reactances

The opposition that a capacitor presents to the flow of alternating current, due to its ability to store and release energy in its electric field.