Solved

The Following Figure Shows Equilibrium at the Industry and Firm

Question 85

Multiple Choice

The following figure shows equilibrium at the industry and firm level.Figure 10.6
The following figure shows equilibrium at the industry and firm level.Figure 10.6    In the figure, S<sub>1</sub>, S<sub>2</sub>, S<sub>3</sub> are the market supply curves.D<sub>1</sub> and D<sub>2</sub> are the market demand curves.MC is the marginal cost curve of the firm.MR<sub>1</sub> and MR<sub>2</sub> are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm. -When firms leave a perfectly competitive market, then, other things remaining unchanged: A) the market supply will decrease but the market price will rise. B) both the market supply and the market price will fall. C) both the market demand and the price will increase. D) the market demand will decrease but the market price will rise. E) both the market demand and the market supply will decrease. In the figure,
S1, S2, S3 are the market supply curves.D1 and D2 are the market demand curves.MC is the marginal cost curve of the firm.MR1 and MR2 are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm.
-When firms leave a perfectly competitive market, then, other things remaining unchanged:


A) the market supply will decrease but the market price will rise.
B) both the market supply and the market price will fall.
C) both the market demand and the price will increase.
D) the market demand will decrease but the market price will rise.
E) both the market demand and the market supply will decrease.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents