Refer to the table below. Suppose all firms in this industry have identical costs to this firm and are producing 15 units of output. One can predict that $$\begin{array} { | c | c | c | c | }
\hline \text { Quantity } & \text { Total Revenue } & \text { Explicit Costs } & \text { Implicit Costs } \
\hline 10 & 50 & 36 & 5 \
\hline 15 & 75 & 63 & 6 \
\hline 20 & 100 & 93 & 7 \
\hline 25 & 125 & 125 & 8 \
\hline 30 & 150 & 161 & 9 \
\hline
\end{array}$$
A)new firms will enter the industry.
B)old firms will exit the industry.
C)firms will attempt to lower their implicit costs.
D)price must rise.

Question

Refer to the table below. Suppose all firms in this industry have identical costs to this firm and are producing 15 units of output. One can predict that $$\begin{array} { | c | c | c | c | } 
\hline \text { Quantity } & \text { Total Revenue } & \text { Explicit Costs } & \text { Implicit Costs } \
\hline 10 & 50 & 36 & 5 \
\hline 15 & 75 & 63 & 6 \
\hline 20 & 100 & 93 & 7 \
\hline 25 & 125 & 125 & 8 \
\hline 30 & 150 & 161 & 9 \
\hline
\end{array}$$
A)new firms will enter the industry.
B)old firms will exit the industry.
C)firms will attempt to lower their implicit costs.
D)price must rise.

Quizplus · Accepted Answer

The firm is making an economic profit of $6 (TR - TC = 75 - 69). New firms will enter the industry to earn this profit.

Refer to the Table Below A)new Firms Will Enter the Industry