In the Short Run, There Are 500 Identical Firms in a Competitive

question 485

Multiple Choice

In the short run, there are 500 identical firms in a competitive market. The firms do not use any resources that are available in limited quantities, and each of them has the following cost structure: The long-run supply curve for this market is

• A) positively sloped for all prices above $10.
• B) horizontal at a price of $5.
• C) horizontal at a price of $6.
• D) horizontal at a price of $7.

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Definitions:

Business Owners

Individuals who own and operate a business, assuming both the risks and rewards associated with running the enterprise.

Government Involvement

The participation or intervention of a governmental body in various aspects of society, including the economy, education, and public policy.

Social Crisis

A situation that leads to significant disruption or harm to a society, potentially arising from economic, political, or environmental challenges.

Privatized System

A setup where services or enterprises once operated by the government are transferred to private sector control and ownership.