Question 32 10 3.5 a ATC AVC 1 2 3 4 5 6 7 8 Quantity Refer to the above figure. If the price is $4 and not expected to rise, what will happen in the long-run? O It will produce where MC = $4. The firm will exit the market. The firm will shut down. Average costs will fall. 00 7+ 6 Price 3+ MC

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 1SCQ: Identify the following situations as an example of a negative or a positive externality: You are a...
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Question 32
10
9 +
8-
4.5
3.S
2
ATC
AVC
12
5 6 7 8 Quantity
Refer to the above figure. If the price is $4 and not expected to rise, what will happen in the long-run?
O It will produce where MC = $4.
The firm will exit the market.
9
u
3
Price
D
MC
O The firm will shut down.
Average costs will fall.
Transcribed Image Text:Question 32 10 9 + 8- 4.5 3.S 2 ATC AVC 12 5 6 7 8 Quantity Refer to the above figure. If the price is $4 and not expected to rise, what will happen in the long-run? O It will produce where MC = $4. The firm will exit the market. 9 u 3 Price D MC O The firm will shut down. Average costs will fall.
Question 33
Which of the following makes it more likely that private solutions to externalities will succeed? Select the best answer.
O high transaction costs
O high prices for legal services
O delays in the bargaining process
a small number of affected parties
Transcribed Image Text:Question 33 Which of the following makes it more likely that private solutions to externalities will succeed? Select the best answer. O high transaction costs O high prices for legal services O delays in the bargaining process a small number of affected parties
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