Consider a Perfectly Competitive Firm in the Short Run

question 153

Multiple Choice

Consider a perfectly competitive firm in the short run.Assume that it is sustaining economic losses but continues to produce at the profit-maximizing (loss-minimizing) output.Which statement is FALSE?

• A)Marginal cost is less than average total cost.
• B)Marginal cost is equal to marginal revenue.
• C)Price is equal to marginal cost.
• D)Marginal cost is less than average variable cost.

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Definitions:

Bank Charging

Fees or penalties charged by banks for their services, including account maintenance, ATM usage, and overdrafts.

Loan

A financial agreement in which one party lends money to another, which the borrower agrees to repay with interest over a specified period.

Cash Flows

Represents the movements of cash into and out from a business, highlighting its operational health and financial stability.

Return

The gain or loss of a security in a particular period, including any dividends or interest, expressed as a percentage of the investment's initial cost.