Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company
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In Exhibit 7-15, what market price would cause E-Z-Care to just break even?

The textile industry is composed of a large number of small firms. In recent years, these firms have suffered economic losses, and many sellers have left the industry. Economic theory suggests that these conditions will

a. shift the demand curve outward so that price will rise to the level of production cost. b. cause the remaining firms to collude so that they can produce more efficiently. c. cause the market supply to decline and the price of textiles to rise. d. cause firms in the textile industry to suffer long-run economic losses.

In a market with a fixed number of firms, as long as price is above average

a. variable cost, each firm's marginal-cost curve is its supply curve. b. variable cost, each firm's average-total-cost curve is its supply curve. c. total cost, each firm's marginal-cost curve is its supply curve. d. total cost, each firm's average-total-cost curve is its supply curve.