zero economic profits in the short run and shut down. positive economic profits in the short run. zero economic profits in the short run run but remain in business. negative economic profits in the short run but remain in business. negative economic profits in the short run and shut down.

zero economic profits in the short run and shut down. positive economic profits in the short run. zero economic profits in the short run run but remain in business. negative economic profits in the short run but remain in business. negative economic profits in the short run and shut down.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 2.4P

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Question

Consider the graph below. Suppose that a firm in a competitive
market has the cost curves shown in the graph. If the market price
falls below $4.50, the firm will earn
13
12
II
10
w
& Price
MC
ATC
AVC
11
Quay
zero economic profits in the short run and shut down.
positive economic profits in the short run.
zero economic profits in the short run run but remain in business.
negative economic profits in the short run but remain in business.
negative economic profits in the short run and shut down.

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