Question 1
If the price of an input increases, each individual firm's marginal cost curve shifts ________ and the industry supply curve ________.
◦ downward; shifts to the left
◦ downward; shifts to the right
◦ up; does not change
◦ up; shifts to the left
Question 2
Refer to the information provided in Figure 9.4 below to answer the question(s) that follow.
![](data:image/png;base64, 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![](data:image/png;base64, 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)
Refer to Figure 9.4. In the short run this firm should ________ and in the long run this firm should ________, if economic conditions do not change.
◦ shut down; exit the industry
◦ exit the industry; shut down
◦ continue to produce where
MC =
MR; expand
◦ continue to produce where
MC =
MR; shut down