If a Competitive Firm Is in Short-Run Equilibrium,then

question 60

Multiple Choice

If a competitive firm is in short-run equilibrium,then

• A) profits equal zero.
• B) it will not operate at a loss.
• C) an increase in its fixed cost will have no effect on profit.
• D) an increase in its fixed cost will have no effect on output.

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Definitions:

Utility Function

A mathematical representation of how certain amounts of goods or services generate levels of satisfaction or utility for an individual or an entity.

Coconut Consumption

The act of using coconuts, either by eating or in the production of products such as oil, within an economic system.

Competitive Market

A market structure characterized by a large number of buyers and sellers, so no single participant has significant market power.

Profit Maximization

The operation by which businesses deduce the pricing and quantity of output that maximizes profit gains.