Consider the figure below displaying the cost curves of a competitive firm. In the at p2 the firm will at på the firm will SHORT-run, at p₁ the firm will and at p4 the firm will $ P1 P2 P3 P4 91 92 93 94 MC AC AVC 95 -9 A. make normal profit; make no profit; make losses; exit B. make losses; makes supernormal profit; make normal profit; make losses C. make supernormal profit; make normal profit; make losses; shut down D. exit; make normal profit; enter; shut down E. always make some profit

Consider the figure below displaying the cost curves of a competitive firm. In the at p2 the firm will at på the firm will SHORT-run, at p₁ the firm will and at p4 the firm will $ P1 P2 P3 P4 91 92 93 94 MC AC AVC 95 -9 A. make normal profit; make no profit; make losses; exit B. make losses; makes supernormal profit; make normal profit; make losses C. make supernormal profit; make normal profit; make losses; shut down D. exit; make normal profit; enter; shut down E. always make some profit

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 20RQ: What two lines on a cost curve diagram intersect at the zero-profit point?

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Question

Consider the figure below displaying the cost curves of a competitive firm. In the
SHORT-run, at p₁ the firm will
at p2 the firm will
at på the firm will
and at p4 the firm will
$
P1
P2
P3
P4
‒‒‒‒‒‒
91 92 93 94
MC
AC AVC
95
A. make normal profit; make no profit; make losses; exit
B. make losses; makes supernormal profit; make normal profit; make losses
C. make supernormal profit; make normal profit; make losses; shut down
D. exit; make normal profit; enter; shut down
E. always make some profit

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