In the Short Run, a Perfectly Competitive Firm

question 101

Multiple Choice

In the short run, a perfectly competitive firm

• A) can make an economic profit, incur an economic loss, or make zero economic profit.
• B) cannot shut down.
• C) will not incur an economic loss if it shuts down.
• D) must make zero economic profit.

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Definitions:

Reasonable Basis

A justification or foundation for belief or action that is considered fair or sensible under given circumstances.

Claims

Demands for something due or believed to be due, typically used in the context of legal or insurance disputes.

Consent Order

A statement in which a company agrees to stop disputed behavior but does not admit that it broke the law.

Federal Trade Commission

An independent agency of the United States government, established in 1914 to prevent unfair business practices and to protect consumers.