In the Short Run, a Perfectly Competitive Firm Will Always

question 141

Multiple Choice

In the short run, a perfectly competitive firm will always shut down if total revenue is ____ at all positive output levels.

• A) less than total cost
• B) less than total cost but greater than variable cost
• C) less than total cost but greater than fixed cost
• D) greater than fixed cost
• E) less than variable cost

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Definitions:

Long-lived Assets

Assets that provide economic benefit for more than one accounting period, typically including property, plant, and equipment.

Demolition

The process of tearing down or destroying a building or structure, usually in order to make way for new construction.

Capitalization

The accounting practice of recording a cost/expense as an asset on the balance sheet rather than expensing it immediately.

Title Insurance

An insurance policy that protects real estate owners and lenders against any property loss or damage they might experience due to liens, encumbrances, or defects in the title to the property.