Respuesta :
This question is incomplete, I got the complete one from google as:
Output Total cost
0 5
1 10
2 12
3 15
4 24
5 40
If the market price is $16, this firm will a. produce 4 units of output in the short run and exit in the long run. b. produce 5 units of output in the short run and exit in the long run. c. shut down in the short run and exit in the long run. d. produce 5 units of output in the short run and face competition from new market entrants in the long run
Answer:
Option D is correct- If the market price is $16, this firm will produce 5 units of output in the short run and face competition from new market entrants in the long run.
Explanation:
The fixed cost is $5, this indicates that when the market price is $16, the marginal cost is also $16.
When the 5th unit is produced, the total revenue received will be $80 while the total cost will be $40. This indicates that there will be a positive economic profit which will bring new firms in the long run.
Hence, option D is the correct answer - If the market price is $16, this firm will produce 5 units of output in the short run and face competition from new market entrants in the long run.
In a situation where the market price is $16, it should be noted that the firm will D. produce 5 units of output in the short run and face competition from new market entrants in the long run.
It should be noted that the fixed cost that's given in the question is $5. The marginal cost is $16. This is the cost that's incurred as a result of an additional purchase made.
Therefore, when the market price is $16, it should be noted that the firm will produce 5 units of output in the short run and face competition from new market entrants in the long run.
Learn more about market price on:
https://brainly.com/question/16003613
