Figure 9-17 Which of the Following Statements About the Competitive Price-Taker Firm

question 139

Multiple Choice

Figure 9-17
Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?

• A) Short-run losses are minimized at output level q* because MR = MC there.
• B) The firm should shut down in the short run.
• C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost.
• D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost.
• E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.

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