In the Short Run, a Perfectly Competitive Firm

question 477

Multiple Choice

In the short run, a perfectly competitive firm

• A) shuts down if it incurs any economic loss.
• B) incurs an economic loss if it shuts down.
• C) does not consider total revenue in its shut down decision.
• D) can earn a small economic profit while being shut down.

---

Definitions:

Treasury Stock

Shares once issued and then retrieved by the originating company, lowering the volume of shares trading on the open market.

Par Value

A nominal or face value given to a share of stock or a bond, often used in accounting to determine legal capital or in the issuance of shares.

Common Stock

Type of equity security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Par Value

A nominal value assigned to shares of stock in a company's charter, not necessarily reflecting market value.