[Solved] Use the Figure Below to Answer the Following Questions
Question 88
Multiple Choice
Question 88Use the figure below to answer the following questions.
Figure 12.4.3
-Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. Firms are
A)making an economic profit, and some firms leave the market. Market supply decreases.
B)making an economic profit, and some firms enter the market. Market supply increases.
C)incurring an economic loss, and some firms leave the market. Market supply decreases.
D)incurring an economic loss, and some firms enter the market. Market supply increases.
E)incurring an economic loss, but since they are covering average variable cost, no one will exit the market in the long run.
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Related Questions
- Q83:Use the figure below to answer the following questions.
Figure 12.4.1
-Refer to Figure 12.4.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run,
A)firms that remain in the market will expand production.
B)market demand will increase.
C)market supply will increase.
D)firms will enter the market.
E)firms that remain in the market will reduce production. - Q84:Use the figure below to answer the following questions.
Figure 12.4.2
-Refer to Figure 12.4.2, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market
A)demand will increase.
B)demand will decrease.
C)supply will increase.
D)supply will decrease.
E)supply and market demand will decrease. - Q85:Use the figure below to answer the following questions.
Figure 12.4.2
-Refer to Figure 12.4.2, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run,
A)firms that remain in the market will expand production.
B)market demand will increase.
C)market supply will decrease.
D)firms will exit the market.
E)firms that remain in the market will decrease production.
- Q86:Use the figure below to answer the following questions.
Figure 12.4.3
-Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market
A)demand will increase.
B)demand will decrease.
C)supply will increase.
D)supply will decrease.
E)demand and market supply will both increase.
- Q87:Use the figure below to answer the following questions.
Figure 12.4.3
-Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run,
A)firms that remain in the market will expand production.
B)market demand will increase.
C)firms will adopt labour-saving technology.
D)industry output will remain constant.
E)firms will enter the market.
- Q89:If firms exit an market, the A)market supply curve shifts leftward. B)price of the good falls. C)economic profit of the remaining firms decrease. D)total market output increases. E)economic profit of the remaining firms stay the same.
- Q90:When a perfectly competitive market is in long-run equilibrium, A)at least one firm makes an economic profit. B)all firms make zero economic profit. C)firms enter the market if other firms are making an economic profit. D)firms exit the market if other firms are incurring an economic loss. E)marginal revenue equals minimum average variable cost.
- Q91:Long-run equilibrium occurs in a competitive market when A)economic profit and economic loss have been eliminated. B)no barriers to entry exist. C)all firms are operating at their shutdown points. D)price equals marginal cost. E)total revenue is maximized.
- Q92:Which one of the following does not occur in the long run when firms in a market make an economic profit? A)Firms enter the market. B)The market supply curve shifts rightward. C)Each firm increases production. D)Economic profit of each firm decreases. E)Market price falls.
- Q93:Firms will stop exiting a market only when A)marginal revenue equals price. B)marginal revenue equals marginal cost. C)all remaining firms are making an economic profit. D)all remaining firms are making zero economic profit. E)marginal revenue equals average fixed cost.
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