A Firm That Makes Zero Economic Profits

question 10

Multiple Choice

A firm that makes zero economic profits

• A)Must eventually go bankrupt and exit the industry.
• B)Does not cover its variable costs and should shut down in the short run.
• C)Incurs an accounting loss if fixed costs are greater than variable costs.
• D)Covers all its costs,including a provision for normal profit.

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Definitions:

Marketing Program

A Marketing Program outlines the specific actions a business intends to carry out to appeal to potential customers and persuade them to buy its products or services.

Hoverboards

Self-balancing, electric personal transport devices that consist of two motorized wheels connected by a platform on which the rider stands.

Product Quality

The measure of a product's ability to meet or exceed customer expectations, including durability, reliability, and performance.

Marketing Mix

The mix of variables a company can manage to encourage customers to buy its goods, typically known as product, price, distribution, and marketing.