In the Short Run, a Firm

question 94

Multiple Choice

In the short run, a firm

• A) has at least one fixed factor of production.
• B) can enter an industry where positive profits are being earned.
• C) can exit an industry, and all of its factors of production are variable.
• D) both B and C are correct.

---

Definitions:

Depreciation

The allocation of an asset's cost over its useful life, reflecting a decrease in the value of tangible and intangible assets over time.

Subsidies

Financial support provided by the government to organizations or individuals, making goods or services more affordable.

Transfer Payments

Payments made by the government to individuals without any services or goods being received in return, such as welfare payments or social security benefits.

GDP

Gross Domestic Product entails the comprehensive valuation of every good and service produced in a country over a particular period, serving as a gauge for economic performance.