Under Both Perfect Competition and Monopoly, a Firm

question 90

Multiple Choice

Under both perfect competition and monopoly, a firm:

• A) is a price taker.
• B) is a price maker.
• C) will shut down in the short-run if price falls short of average total cost.
• D) always earns a pure economic profit.
• E) sets marginal cost equal to marginal revenue.

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Definitions:

Proposed New Product

A concept or prototype being considered by a company for development and market introduction.

Discount Rate

The interest rate used to discount future cash flows to their present value.

Net Present Value

A financial metric that calculates the value of a series of cash flows by discounting them to their present value, considering the time value of money.

Working Capital

A financial metric representing the difference between a company's current assets and its current liabilities, indicating the short-term financial health and operational efficiency.