Assume that a firm in a perfectly competitive market is making a loss in theshort run. In the long run, firms will [Select ], the market[ Select ]v will [Select ]v and losseswill decrease because price iv[Select ]increasingdecreasing 10ATCATC2 ATC3 ATCA6.4810Quantity (thousands of copies per day)The owner of a copy shop has 4 options for building a factory to supply copiesto local businesses. The 4 curves above represent the short-run ATC curves foreach factory configuration. The factories vary based on size and capital. Usingthe ATC data, if the owner expects to produce 3 thousand copies per day, thenthe owner will choose factoryO 1O 2O 3O 4****** *マAverage cost (cents per copy)

1) Assume that the firm in a perfectly competitive market and in the short run, it is making a…

Assume that a firm in a perfectly competitive market is making a loss in the short run. In the long run, firms will [Select ] , the market [ Select ] will [ Select ] v and losses [Select ] increasing decreasing will decrease because price

Assume that a firm in a perfectly competitive market is making a loss in the short run. In the long run, firms will [Select ] , the market [ Select ] will [ Select ] v and losses [Select ] increasing decreasing will decrease because price

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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Question

Assume that a firm in a perfectly competitive market is making a loss in the
short run. In the long run, firms will [Select ]
, the market
[ Select ]
v will [Select ]
v and losses
will decrease because price iv[Select ]
increasing
decreasing

10
ATC
ATC2 ATC3 ATCA
6.
4
8
10
Quantity (thousands of copies per day)
The owner of a copy shop has 4 options for building a factory to supply copies
to local businesses. The 4 curves above represent the short-run ATC curves for
each factory configuration. The factories vary based on size and capital. Using
the ATC data, if the owner expects to produce 3 thousand copies per day, then
the owner will choose factory
O 1
O 2
O 3
O 4
****** *
マ
Average cost (cents per copy)

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