ECON 103 Study Guide - Midterm Guide: Opportunity Cost, Ceteris Paribus, Average Cost
24 Oct 2018
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Quantity: suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. If additional units of any good could be produced at a constant opportunity cost, the production possibilities frontier would be: negatively sloped, bowed inward (convex), linear, bowed outward (concave), both a and c . Answer the following six questions based upon the diagram at the right that refers to a perfectly competitive firm in the short run. Assume all firms in the industry have the same costs: if the market price is , this firm would, produce 26 units and make economic profits of. : produce 26 units and make economic profits of , produce 26 units and earn economic profits of , produce 30 units and earn economic profits of , shut down. 0: if the market price is .
