Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 14 13 8 6 4 2 MC 1 2 3 QUANTITY Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is O a. exactly $13. O b. less than $13 but more than $6. O c. above $13. O d. less than $6. ATC AVC 5

Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 14 13 8 6 4 2 MC 1 2 3 QUANTITY Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is O a. exactly $13. O b. less than $13 but more than $6. O c. above $13. O d. less than $6. ATC AVC 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 4 13 12 10 14 8 6 4 2 MC 1 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. 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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