QUESTION 48 Figure 7-4 shows the relationship between the various costs of a per

Question

QUESTION 48 Figure 7-4 shows the relationship between the various costs of a perfectly competitive firm. In the figure, when the market price equals $105 and the firm sells 675 units of output, the firm: Figure 7-4 $105- Averoge Coat $88 $55 - Cos 460 1675 q 600 O a. should sell more units of its output to earn higher prices. O b, is earning a normal profit. O c. is caming positive economie profit. dis experiencing a loss, but should continue operating temporarily because e, is experiencing a loss and should shut down. QUESTION 49 According to Harvard economists Richard Freeman and James Medoff, the cffect of unions is to: O a decrease output in the union sector and have no impact on output in the nonunion sector o b. increase output in the union sector and decrease output in the nonunion sector e c. decrease output in the union sector and increase output in the nonunion sector e d. decrease output in the union sector and in the nonunion sector. O e. increase output in the union sector and in the nonunion sector Save All Ans

Explanation / Answer

Ans is C

Since at output of 675 units, price is above ATC which means firm is earning supernormal or economic profit

Economic profit is the profit above normal rate of profit

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

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