Question

If the market price is $4, this firm will a. Produce 3 units of output in the short run and exit in the long run b. Produce 4 units of output in the short run and exit in the long run c. Produce 5 units of output in the short run and face competition from new market entrants in the long run d. Shut down in the short run and exit in the long run

Answer 1

Answer:

a. Produce 3 units of output in the short run and exit in the long run

Explanation:

According to the question, the data provided is as follows

The market price is $4

Based on the above information, since the price on the market is 4

So we can conclude that the firm could produced the 3 units of output and after that it would be exit in the long run

Therefore the correct option is a

And all the other options are wrong