In the Short Run,a Competitive Firm May Choose to Operate

question 164

Multiple Choice

In the short run,a competitive firm may choose to operate at a loss

• A) to ensure that other firms make a loss as well.
• B) only if those losses are economic losses.
• C) to gain market power in the future.
• D) only if those losses are accounting losses.
• E) to recover a portion of its fixed costs.

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Definitions:

Coordination of Benefits (COB)

A process whereby insurance companies share costs and determine payment responsibilities when a person is covered under multiple insurance plans.

Duplication of Payment

The act of making the same payment more than once, often due to administrative error or oversight, leading to unnecessary financial outlay.

Fee-For-Service

Payment for each service that is provided; individuals who choose to pay high premiums so that they have the flexibility to seek medical care from health care professionals of their choice.

High Premiums

A term related to insurance indicating a higher cost for coverage, usually due to perceived increased risk or higher value of what's being insured.