In the Short Run, a Perfectly Competitive fiRm Is Minimizing

question 8

Multiple Choice

In the short run, a perfectly competitive firm is minimizing losses at an output of 250 units. If the market price is £5 and the average cost is £8 per unit, what is the firm's total loss?

• A) £750
• B) £2000
• C) £1250
• D) £400

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes with different production levels.

Average Total Cost (ATC)

The average expense per unit of output, calculated by dividing the overall production cost by the amount of output generated.

Average Total Cost Curve

A graphical representation showing the average total cost of producing different quantities of a good or service.