Which of the Following Is True

question 117

Essay

Which of the following is true?
A.If price falls below average variable cost, the firm will shut down in the short run.
B.Total revenue and marginal revenue are the same in perfect competition.
C.Economic profit per unit is found by subtracting MC from price.
D.Economic profit is always positive in the long run.

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Definitions:

Cost Of Goods Purchased

The cost of goods purchased is the total expense a company incurs to buy the goods that it sells to customers, excluding costs associated with production or manufacturing.

Gross Profit Rate

A financial metric that indicates the percentage of revenue that exceeds the cost of goods sold.

Cost Of Goods Sold

Expenses explicitly tied to the production of a company's sold goods, comprising costs of materials and labor.

Net Sales

Total sales revenue minus returns, allowances, and discounts, representing the actual revenue earned from sales.