If a Firm in a Price-Taker Market Is Earning Zero

question 189

Multiple Choice

If a firm in a price-taker market is earning zero economic profit, it

• A) will shut down in the long run but not the short run.
• B) will also be earning zero accounting profit.
• C) is doing as well as typical firms in other markets.
• D) will shut down in the short run.

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Definitions:

Mental Module

A concept in cognitive science that suggests the mind consists of innate, self-contained units responsible for particular cognitive functions.

Nonverbal Actions

Communication methods not involving words, such as gestures, facial expressions, and body language, conveying messages and emotions.

Social Judgment

The process by which people make evaluations or judgments about other people, events, or ideas based on social and cultural norms.

Rational Decision Making

A multi-step process for making logically sound decisions that aims to follow the orderly path from problem identification through solution.