Assume That in the Short Run a Perfectly Competitive Firm

question 173

Multiple Choice

Assume that in the short run a perfectly competitive firm does not produce output and has economic losses.This occurs at the quantity where MR = MC and:

• A)P = ATC and FC = 0.
• B)P < AVC and FC > 0.
• C)AVC > P > ATC and FC = 0.
• D)AVC < P < ATC and FC > 0.

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Definitions:

Deductive Argument

A logical process in which a conclusion follows necessarily from the given premises.

Valid

A deductive argument where the form is such that the conclusion must be true if the premises are assumed to be true.

Premises

Statements or propositions from which a conclusion is drawn in an argument, assumed to be true.

False

Not true or correct; erroneous or misleading.