Answer number 12 Answer number 12 must exceed market supply at the toark pry mus
ID: 1115200 • Letter: A
Question
Answer number 12 Answer number 12 must exceed market supply at the toark pry must exceed market demand at the marke brium prnice altrium p. mot inefficient firms whose their AVC is above the market price vw Figure#i: The cost structure for a firm in a competitive market. naurket price wil leave the market Price MC ATC P7 AVC P6 P3 P2 PI Q1 2 3 Q4 Qs Quantity 10. Refer to Figure #1. When price falls from P. to P1, the firm, finds that it can minimize its profit loss by producing its output at 11. Refer to Figure #1. When price rises froma Pato P., the firm finds that b. it can eam a positive profit by increasing production to Qh d. fixed costs are lower at a production level of Qu t is still maximized at a production level of Q c it can earn a positive profit by increasing production to Qu 12. Refer to Figure #1 The firm will shut down temporarily if it realizes that the market price is between Pand P. Under soch circumstance, the firm a. still has to pay its variable costs, but not its fixed costs. c. still has to pay both its variable costs and its fixed costs. d. has to pay neither its variable costs nor its fixed costs 13. In the long run, a perfectly competitive market, with economic losses will NOT experience: a. an increase in equilibrium price as firms exit. c. a decrease in equilibrium price as old firms exit. b. more firms exit as long as they still make an economic loss d. all of the above. 14. Because a monopolist has market power, which of the following is NOT a characteristic of a monopolist?Explanation / Answer
A firm when operating incurrs fixed cost as well as variable cost. But when a firm decides to shut down temporarily then it will not incurr any variable cost as no production is being done, but the firm will still inevitably incurr the fixed cost.
Thus, the Answer is option B.