In Short-Run Equilibrium, a Perfectly Competitive Firm

question 214

Multiple Choice

In short-run equilibrium, a perfectly competitive firm

• A)may earn a profit or a loss.
• B)always earns a profit.
• C)never earns a profit.
• D)earns a profit only if the firm has no fixed cost.

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Definitions:

Market Maker

An entity that buys and sells securities from their own inventory, ensuring liquidity and trading activity in financial markets.

Fracking

A technique for extracting oil and natural gas from rock by injecting high-pressure fluid to create fractures, allowing resources to be more easily harvested.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers matches the quantity supplied by producers, resulting in market balance.

Nutella

Nutella is a brand of sweetened hazelnut cocoa spread manufactured by the Italian company Ferrero, widely popular worldwide.