In a competitive market the current price is $5 . The typical firm in the market has ATC = $5.50 and AVC = $4.50
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.
b
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In the long run, a perfectly competitive firm can
A) only make an economic profit. B) only make zero economic profit. C) only incur an economic loss. D) make an economic profit, make zero economic profit, or incur an economic loss.
A decrease in government spending will result in a decrease in the price level and a decrease in real GDP in the long run
Indicate whether the statement is true or false
The capacity utilization rate is the ratio of ________ to ________
A) production; capacity B) capacity; production C) capacity; potential GDP D) none of the above
Answer the following statements true (T) or false (F)
1) Uncertainty is the result of incomplete information. 2) Probability is the chance that an event occurs. 3) It is possible for the probability of an event to be 1.50. 4) A probability distribution of a random variable is a listing of all of the possible outcomes of the random variable and the associated probabilities. 5) The larger the extent of variation, the smaller the risk.