Firms Will Make a Profit in the Long Run or Short

question 117

Multiple Choice

Firms will make a profit in the long run or short run if the price is:

• A)equal to marginal revenue.
• B)greater than ATC.
• C)less than MC.
• D)greater than AVC.

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Definitions:

Compounded Quarterly

Refers to the process of calculating interest on the principal sum and previously earned interest every three months.

Lease Payments

Regular payments made by a lessee to a lessor for the use of a leased asset over an agreed period.

Capital Cost

The one-time expenditure on physical assets such as buildings, machinery, and equipment, not to be confused with operational or day-to-day expenses.

Ordinary Annuity

An annuity in which the payments are made at the end of each period, such as monthly or annually.