A Perfectly Competitive Firm Shuts Down If the Price of Its

question 53

Multiple Choice

A perfectly competitive firm shuts down if the price of its product is

• A) greater than its minimum average variable cost.
• B) less than its minimum average variable cost.
• C) greater than its maximum variable cost.
• D) less than its minimum total cost.

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Definitions:

Systematic Risk

A risk associated with the entire market or a segment of it, which cannot be lessened by diversifying holdings.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield of government bonds.

Stock Index

A statistic that reflects the composite value of a selected group of stocks, representing their aggregate performance.

Dividend

A corporation's distribution of earnings to its shareholders, usually made as a payment.