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

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 17P

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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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yout References Mailings Review View V Tell me what you want to do.. A A Aa - AaBbCcDc AAB6CCI AaBbCcDc AaBbC AaBbC A - ay - A- 1 Normal Body Text 1 No Spac. Heading 1 Heading Font Paragraph Styles Quesuun z. ATC MC A VC 2.8 10 11 12 Quan tily (per day The graph above shows the cost structure of a perfectly competitive firm. Use the graph above to answer the following questions. a. At which price the firm will earn zero economic profit? b. What is the shut-down price? c. Above what price the firm will earn positive economic profit? d. At what price range the firm will incur a loss? Why would t continue the production? Explain. e. Show the supply curve of the firm on the graph. Explain. ASUS f6 f7 F10 F12 IA prt sc & 24 7 8. 9. 1/2 R T Y 16 5, (sop) a p00 pUD D
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