M/c question - Micro 31) Refer to Figure 14-13. When a firm in a competitive market, like the one depicted in panel (a), observes market price rising from P1 to P2, what is most likely the cause? A. the exit of existing firms in the market B. an increase in market supply from Supply0 to Supply1 C. the entrance of new firms into the market D. an increase in market demand from Demand0 to Demand1 30) A profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost. What should it do? A. It should increase its output. B. It should reduce its output but continue operating. C. It should shut down. D. It should keep output the same.
M/c question - Micro 31) Refer to Figure 14-13. When a firm in a competitive market, like the one depicted in panel (a), observes market price rising from P1 to P2, what is most likely the cause? A. the exit of existing firms in the market B. an increase in market supply from Supply0 to Supply1 C. the entrance of new firms into the market D. an increase in market demand from Demand0 to Demand1 30) A profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost. What should it do? A. It should increase its output. B. It should reduce its output but continue operating. C. It should shut down. D. It should keep output the same.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
M/c question - Micro
31) Refer to Figure 14-13. When a firm in a competitive market, like the one depicted in panel (a), observes market
- A. the exit of existing firms in the market
- B. an increase in market supply from Supply0 to Supply1
- C. the entrance of new firms into the market
- D. an increase in market
demand from Demand0 to Demand1
30) A profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost. What should it do?
A. It should increase its output.
B. It should reduce its output but continue operating.
C. It should shut down.
D. It should keep output the same.
Transcribed Image Text:(a)
(b)
Price
Price
Supplyo
Supplys
MC
ATC
P2
P2
Po
Po
Demand,
Demand,
Quantity
Quantity
Figure 14-13
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education