Figure 10-4 ​

question 169

Multiple Choice

Figure 10-4
​
-For a competitive firm, if at least some portion of its short-run average cost curve lies below the price of the product, we can conclude that the firm

• A)is earning a profit at the profit maximizing output level.
• B)is incurring short-run losses.
• C)is earning zero economic profits.
• D)is going to shut down.

---

Definitions:

Underground Deposits

Natural accumulations of minerals, oil, gas, or water located beneath the earth's surface which can be extracted for use or sale.

Depletion Expense

An accounting and tax concept used to allocate the cost of extracting natural resources from the Earth over the period of extraction.

Extracted

Removed or taken out, often referring to the process of obtaining specific data or substances from a larger set or material.

Sold

Refers to the completion of a transaction where goods or services are exchanged for payment.