Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question

Transcribed Image Text:Industry
$4
Representative firm
MC
ATC
d = MR
D.
b.
Figure 9.5
Price per unit

Transcribed Image Text:Refer to the information provided in Figure 9.5 below to answer the question that follows.
Industry
Representative firm
S
MC
ATC
d = MR
Figure 9.5
Refer to Figure 9.5. From the diagram, existing firms in this industry make
economic profits, and as long as this continues,
O a.
zero; new firms will not enter it and existing firms will not leave it either
O b. positive; new firms will enter the industry and existing firms will not leave it
O c. negative; new firms will not enter it and existing firms will leave it
O d. positive; the industry supply curve will shift to the left
Price per unit
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