If a Perfectly Competitive Firm Is Incurring a Short-Run Loss

question 152

Multiple Choice

If a perfectly competitive firm is incurring a short-run loss, it

• A)then will incur a long-run loss
• B)will shut down
• C)will continue to operate in the short run if its fixed cost is covered
• D)will continue to operate in the short run if its variable cost is covered
• E)will raise its price in the short run

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Definitions:

MD&A

Management Discussion and Analysis, a section of a company's financial report where management discusses the financial and operational factors influencing results.

Comprehensive Annual Financial Reports

Detailed financial reports prepared by governments that include a wide range of financial information including the results of financial operations, condition of funds, and compliance information.

Statistical Section

A part of comprehensive annual financial reports that includes tables and charts showing financial trends, fiscal capacity, and demographic information over multiple years.

FASB

Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States.