In the Short Run, a Perfectly Competitive Firm

question 291

Multiple Choice

In the short run, a perfectly competitive firm

• A) might incur an economic loss
• B) will always make an economic profit.
• C) chooses its optimal plant size.
• D) is in equilibrium only when its economic profit is zero.

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Definitions:

Initial Price

The original cost or price of a good or service when it is first offered for sale, often used as a baseline for pricing strategies.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, used to cover fixed costs and contribute to profit.

Machine Hour

A unit of measure representing the operation of a machine for one hour, often used in cost accounting.

Floor Deodoriser

A cleaning agent specifically designed to eliminate odors and freshen floors in residential or commercial spaces.