Which of the Following Is True

question 167

Multiple Choice

Which of the following is true?

• A) Profit per unit is price minus AVC.
• B) Total economic profit is per unit profit times quantity.
• C) If price is less than ATC, the firm will shut down in the short run.
• D) If price is less than marginal cost, the perfectly competitive firm should raise the price and increase output.

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Definitions:

Dividend Growth Rate

The annual rate at which the dividends paid by a stock is expected to grow.

Market Equilibrium

Market equilibrium is a condition where supply equals demand for a product, resulting in stable prices.

Dual-Class Shares

Equity structures in which one class of shares offers more voting rights than another, typically to concentrate voting power with a certain group or founder.

Minority Shareholder

An investor who owns less than 50% of a company's shares and therefore does not have control over company decisions but may still enjoy rights such as receiving dividends.