In Short-Run Equilibrium, a Competitive Price-Taker Firm

question 92

Multiple Choice

In short-run equilibrium, a competitive price-taker firm

• A) may earn a profit or a loss.
• B) always earns a profit.
• C) never earns a profit.
• D) earns a profit only if the firm has no fixed cost.

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Definitions:

Saving

The act of setting aside money for future use, rather than spending it immediately, often for specific goals or emergencies.

Nominal Exchange Rate

The rate at which one country's currency can be traded for another's, not adjusted for inflation differences between the two countries.

Net Capital Outflow

The difference between the domestic savings and investment in a country, indicating the amount of money flowing out of the country to invest abroad minus the inflow.

Net Exports

The value of a country's total exports minus the value of its total imports; a component of a country's GDP.