Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 14 432 10 8 6 4 2 MC 2 3 QUANTITY ATC AVC 5 Refer to Figure 14-1. If the market price is $5, the firm will earn a. negative economic profits in the short run but remain in business. O b. negative economic profits and shut down. c. zero economic profits in the short run. O d. positive economic profits in the short run.
Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 14 432 10 8 6 4 2 MC 2 3 QUANTITY ATC AVC 5 Refer to Figure 14-1. If the market price is $5, the firm will earn a. negative economic profits in the short run but remain in business. O b. negative economic profits and shut down. c. zero economic profits in the short run. O d. positive economic profits in the short run.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 4CQQ
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Question
![Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
PRICE
20
18
16
14
432
10
8
6
4
2
MC
2
3
QUANTITY
ATC
AVC
5
Refer to Figure 14-1. If the market price is $5, the firm will earn
a. negative economic profits in the short run but remain in business.
O b. negative economic profits and shut down.
c. zero economic profits in the short run.
O d. positive economic profits in the short run.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F471814f6-811e-49de-836f-0a8357b675c7%2F99a9ba42-b694-428c-8eaf-ce9e277940ec%2Fz5yppg_processed.png&w=3840&q=75)
Transcribed Image Text:Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
PRICE
20
18
16
14
432
10
8
6
4
2
MC
2
3
QUANTITY
ATC
AVC
5
Refer to Figure 14-1. If the market price is $5, the firm will earn
a. negative economic profits in the short run but remain in business.
O b. negative economic profits and shut down.
c. zero economic profits in the short run.
O d. positive economic profits in the short run.
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