Suppose That in the Short Run, a Monopolistically Competitive Firm

question 207

Multiple Choice

Suppose that in the short run, a monopolistically competitive firm sells its product for $35 per unit.Its average total cost at this level of output is $39.This means that:

• A)the firm makes a short-run profit of $4 per unit
• B)the firm makes a short-run loss of $4 per unit
• C)the firm makes a short-run and long-run profit of $4 per unit
• D)the firm makes a short-run and long-run loss of $4 per unit

---

Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.

Inventory Adjustment

Inventory adjustment is the process of altering the book value of inventory to match the actual physical inventory, accounting for discrepancies, losses, or damages.

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to vote on corporate matters and receive dividends.

Cash Flow Statement

A financial report that tracks the amount of cash and cash equivalents entering and leaving a company.