MULTIPLE CHOICE. Choose the one alternative that best completes the statement or

Question

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Dollars per unit of output SMC SAC S40 P-MR Figure 8.7.1 1) Refer to Figure 8.7.1 above. When market price equals so, the long run level of output will be: A)1 B) 2 943 D) 42 or 43 1) 2) 2) Refer to Figure 8.7.1 above. When market price equals $40, we can expect: A) exit of firms and a decrease in market price. B) exit of firms and an increase in market price. C) entry of firms and a decrease in market price. D) entry of firms and an increase in market price.

Explanation / Answer

1)When market price=40 then quantity=q3 because profit is maximised when MR=MC

2)ans is C. When price=40 firm is making economic profit due to whoch there will be entry of new firms which will shift the supply curve right and price decreases

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.