-The Above Figure Shows a Perfectly Competitive Firm

question 21

Multiple Choice

-The above figure shows a perfectly competitive firm. If the market price is $5 per unit, the firm

• A) will definitely shut down to minimise its losses.
• B) will stay open to produce and will make zero economic profit.
• C) will stay open to produce and will incur an economic loss.
• D) will stay open to produce and will make an economic profit.
• E) might shut down but more information is needed about the fixed cost.

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Definitions:

Accounts Payable

Accounts Payable represents a company's obligations to pay off a short-term debt to its creditors or suppliers within a given time frame.

Private Placement

A means of raising capital through the sale of securities to a small number of select investors rather than through a public offering.

Initial Public Offering

The process by which a private company becomes publicly traded by offering its shares to the public for the first time.

OSC

Typically refers to the Ontario Securities Commission, a regulatory body responsible for overseeing the capital markets in Ontario, Canada.