Figure 9-16$/9MC6.706.00ATC4.90AVCd = MR4.00%3D2.802.606 812 14If the price-taker firm in Figure 9-16 9-16.RDg is producing at the proft maximizing rate of output, then which of the following are true?O The frm is making zero economic profits and the industry is in long-run equilibriumO The firm is making a positive economic proft and new firms will enter the industry in the long runThe firmis making an economic loss and firms will exit the industry in the long run* The firm is making a positive economic profit, but high barriers to entry will keep potential competitors out of the market so it can continue to make positive economicprofits in the fong-run

A price taker firm produces at the intersection point of demand and MC curve in the short-run in…

Answered: $/4 MC 6.70 6.00 ATC 4.90 4.00 AVC d =…

Business

Economics

$/4 MC 6.70 6.00 ATC 4.90 4.00 AVC d = MR 2.80

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Figure 9-16
$/9
MC
6.70
6.00
ATC
4.90
AVC
d = MR
4.00
%3D
2.80
2.60
6 8
12 14
If the price-taker firm in Figure 9-16 9-16.RDg is producing at the proft maximizing rate of output, then which of the following are true?
O The frm is making zero economic profits and the industry is in long-run equilibrium
O The firm is making a positive economic proft and new firms will enter the industry in the long run
The firmis making an economic loss and firms will exit the industry in the long run
* The firm is making a positive economic profit, but high barriers to entry will keep potential competitors out of the market so it can continue to make positive economic
profits in the fong-run

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