The above figure represents the cost curves for a

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Macroeconomics for Today
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Chapter 1A / Exercise 20
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6. The above figure represents the cost curves for a perfectly competitive firm. Above what price will the firm be making positive economic profits? A) $5 B) $12
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Macroeconomics for Today
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Chapter 1A / Exercise 20
Macroeconomics for Today
Tucker
Expert Verified
C) $4 D) $2 Feedback: At $5, the firm is making zero economic profits because at that price, P=ATC at the profit maximizing output. Therefore, above $5, the firm will be making positive economic profits. Table for Individual Question Feedback Points Earned: 0.0/1.0 Correct Answer(s): A
7. In the above figure, the left hand side graph represents a perfectly competitive industry and the right hand side graph represents a perfectly competitive firm. Suppose that the original demand curve is D 0 , as labeled. Due to an increase in income, the demand curve shifts to the right. Then,
Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): A

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