In the Short Run, a Perfectly Competitive Firm

question 5

Multiple Choice

In the short run, a perfectly competitive firm

• A) can possibly make an economic profit or possibly incur an economic loss.
• B) can make only zero economic profit.
• C) produces the level of output that sets the average total cost equal to the market price.
• D) can change only its fixed inputs.
• E) can vary all its inputs.

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Definitions:

Law of Equity

The law of equity refers to a set of principles that allow courts to apply justice based on fairness, in situations where the application of strict legal rules would result in an unjust outcome.

Precedent

A legal case that establishes a principle or rule that is followed by courts in future cases with similar issues or facts.

Civil Code

A comprehensive collection of laws and legal principles that deal with the rights and duties of individuals and legal entities in private matters.

Law of Equity

A system of law that supplements the common law and rectifies situations where the application of the common law would be unjust.