In the Short Run, Fixed Costs for a Profitable Competitive

question 136

Multiple Choice

In the short run, fixed costs for a profitable competitive firm are

• A)zero.
• B)negative.
• C)important determinants of the output level.
• D)irrelevant in determining the optimal level of output.

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Definitions:

Potential Entrant

Refers to a business or company that is not currently in a market but has the capability and interest to enter the market if certain conditions are met.

Dominant Strategy

A strategy in game theory that yields the best outcome for a player regardless of what strategies other players choose.

Nash Equilibria

A situation in a non-cooperative game where no player can benefit by changing strategies, assuming the other players also don't change their strategies.

Maximin Strategy

A decision rule in game theory that aims to maximize the minimum gain possible from a set of strategies.