Figure 14-1 Suppose That a Firm in a Competitive Market Has the Has

question 144

Multiple Choice

Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
-Refer to Figure 14-1. If the market price is $5.00, the firm will earn

• A)positive economic profits in the short run.
• B)negative economic profits in the short run but remain in business.
• C)negative economic profits and shut down.
• D)zero economic profits in the short run.

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Definitions:

Compete

To engage in an effort to win or excel against others, often in business, sports, or any area where performance and achievement are measured against others.

Apparent Authority

Apparent authority refers to a situation where a third party reasonably believes that an agent has the authority to act on behalf of another (the principal), even if such authority has not been explicitly or implicitly granted.

Silent Partners

Investors in a partnership who contribute capital but do not take part in the management and are not known to the public.

Duty to Serve

An obligation to provide service, often seen within certain professions or regulated industries.