If a Perfectly Competitive Firm Decides to Shut Down in the Short

question 278

Multiple Choice

If a perfectly competitive firm decides to shut down in the short run, its loss will equal its

• A) minimum average variable cost, AVC.
• B) total variable cost, TVC.
• C) total fixed cost, TFC.
• D) average total cost, ATC.

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Definitions:

Labor Force

The total number of workers, including both the employed and the unemployed

Expected Inflation

The rate at which general prices of goods and services are anticipated to rise over a specific period.

Actual Inflation

The actual rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Unemployment Rate

The percentage of the labor force that is unemployed and actively seeking employment.