Consider a Firm Operating in a Competitive Market

question 491

Multiple Choice

Consider a firm operating in a competitive market. The firm is producing 40 units of output, has an average total cost of production equal to $6, and is earning $240 economic profit in the short run. What is the current market price?

• A)$0
• B)$6
• C)$10
• D)$12

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Definitions:

Operating Expenses

Costs associated with the day-to-day functioning of a business, such as rent, utilities, payroll, and materials, excluding the cost of goods sold.

Income from Operations

Income from Operations represents the profit earned from a firm's core business activities, excluding deductions of interest and taxes.

Purchase Invoice

A document received by a purchaser confirming the sale of goods or services and indicating the quantities, prices, and terms of sale.

Seller's Name

The designation or name of the individual or entity selling goods or services in a transaction.