Suppose a Firm Operates in the Short Run at a Price

question 32

Multiple Choice

Suppose a firm operates in the short run at a price above its average total cost of production. In the long run the firm should expect

• A)new firms to enter the market.
• B)the market price to rise.
• C)its profits to rise.
• D)Both b and c are correct.

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Definitions:

Democracy

A system of government in which power is vested in the people, who rule either directly or through freely elected representatives.

Self-Efficacy

An individual's belief in their own ability to succeed in specific situations or accomplish a task.

Abilities

Natural or acquired skills and talents that enable individuals to achieve tasks or solve problems.

Reinforcers

Stimuli that increase the probability of a behavior being repeated.