Jose's Restaurant Operates in a Perfectly Competitive Market

question 471

Multiple Choice

Jose's restaurant operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $20, AVC = $15, and the price per unit is $10. In this situation,

• A)Jose's restaurant is earning a positive economic profit.
• B)Jose's restaurant should shut down immediately.
• C)Jose's restaurant is losing money in the short run but should continue to operate.
• D)the market price will rise in the short run to increase profits.

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Definitions:

Private Property

Ownership of assets, including land and goods, by individuals or corporations, recognized and protected by law.

Gender Equality

The state in which access to rights or opportunities is unaffected by gender, ensuring that all individuals, regardless of their gender, have equal conditions for realizing their full human rights and potential.

Social Forces

External societal factors that influence the actions, behaviors, and attitudes of individuals, such as norms, laws, and cultural trends.

Choosing a Mate

The process of selecting a partner for romantic or reproductive purposes, influenced by a variety of social, psychological, and biological factors.