ECON 2020 Exam 3 Version 1

ECON 2020 Exam 3 Version 1

Test 3 Econ 2020 FALL 2014 Version 1


Instructions: Choose the best answer. You have the full class time to take the exam.
There are 100 possible points. Each question counts 4 points. Good Luck!

Figure 14-4



Price
MC ATC



AVC
P7

P6
P5
P4


P3
P2
P1




Q1 Q2 Q3 Q4 Q5 Quantity




1. Refer to Figure 14-4. In the short run, if the market price is higher than P4 but less than P6,
individual firms in a competitive industry will earn
a. positive profits.
b. zero profits.
c. losses but will remain in business.
d. losses and will shut down.



2. Refer to Figure 14-4. In the short run, if the market price is P4, individual firms in a
competitive industry will earn
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, a. positive profits.
b. zero profits.
c. losses but will remain in business.
d. losses and will shut down.




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