When a Firm Earns a Normal Rate of Return, It

question 281

Multiple Choice

When a firm earns a normal rate of return, it

• A) earns a profit.
• B) breaks even.
• C) suffers a loss.
• D) should shut down.

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Definitions:

Diagram (A)

A graphical representation used to illustrate or clarify information, processes, or systems.

Price

The amount of money expected, required, or given in exchange for something else.

Quantity

The amount or number of a material or immaterial good considered as a unit or in total.

Long-Run Cost Diagram

A graphical representation that shows how the costs incurred by a firm change over time with varying levels of output when all inputs are variable.