Consider the Following Short- Run Cost Curves for a Perfectly

question 18

Multiple Choice

Consider the following short- run cost curves for a perfectly competitive firm. FIGURE 9- 2
-Refer to Figure 9- 2. If the market price is $2, the firm will

• A) shut down and make zero profit.
• B) produce 300 units and make a loss equal to total variable cost.
• C) shut down and suffer a loss equal to its fixed cost.
• D) produce 200 units and make a loss equal to its total fixed cost.
• E) continue operating in the short run and suffer a loss that is less than its fixed cost.

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Definitions:

ROI

Return on Investment, a financial metric used to measure the efficiency and profitability of an investment.

Demographic Segmentation

The segmentation of a market into different groups according to factors like age, gender, income, occupation, and education levels.

Consumer Markets

Markets comprised of individuals and households that purchase goods and services for personal use.

Future Profit

The expected earnings or economic benefits that a company or investment will generate in future periods.