1-this profit maximizing firm’s shut down point is at a price of: a) $4 b)$8 c)$6 d)$7 2-Refer to the figure, if the market price is $8, what will happen in the long run? a)Nothing will change in the industry and this firm will earn zero economic profit b)Firms will exit the industry until each firm is earning zero economic profit c)This firm will exit the industry d)New firms will enter the industry because there's opportunity for positive profits 3-Refer to the figure, if the market price is $6: a)This firm will cease production in the short run and bear losses equal to it's total fixed cost b)This firm will continue operating in the short run and it will expand it's production in the long run c)This firm will continue operating in the short run, but it will exit the industry in the long run d)This firm will continue operating in the short run and in the long run
1-this profit maximizing firm’s shut down point is at a
a) $4
b)$8
c)$6
d)$7
2-Refer to the figure, if the market price is $8, what will happen in the long run?
a)Nothing will change in the industry and this firm will earn zero economic profit
b)Firms will exit the industry until each firm is earning zero economic profit
c)This firm will exit the industry
d)New firms will enter the industry because there's opportunity for positive profits
3-Refer to the figure, if the market price is $6:
a)This firm will cease production in the short run and bear losses equal to it's total fixed cost
b)This firm will continue operating in the short run and it will expand it's production in the long run
c)This firm will continue operating in the short run, but it will exit the industry in the long run
d)This firm will continue operating in the short run and in the long run
4-Refer to the figure, at the break even point the price is ____ and the firm is earning ____ economic profit.
a)$4, negative
b)$7, zero
c)$7, positive
d)$4, zero
5-Refer to the figure, if the market price is $10
a)This firm will cease production in the short run and bear losses equal to it's total fixed cost
b)This firm will continue operating in the short run and it will expand it's production in the long run
c)This firm will continue operating in the short run, but it will exit the industry in the long run
d)This firm will shut down in the short run and exit the industry in the long run.
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