Figure 14-1 Suppose That a Firm in a Competitive Market Has the Has

Multiple Choice

Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
-Refer to Figure 14-1. If the market price falls below $4.50, the firm will earn

A) positive economic profits in the short run.
B) negative economic profits in the short run but remain in business.
C) negative economic profits in the short run and shut down.
D) zero economic profits in the short run.