If a Struggling Perfectly Competitive Furniture Store in Detroit Shuts

question 95

Multiple Choice

If a struggling perfectly competitive furniture store in Detroit shuts down,it incurs an economic loss equal to its

• A) marginal cost.
• B) total fixed cost.
• C) total variable cost.
• D) average variable cost.
• E) average total cost.

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Definitions:

Profit Share

The portion of a company's profits allocated to employees or partners as a bonus or incentive.

Capital Balances

Refers to the amount of money that each partner in a partnership has contributed and maintained in the business.

Net Income

The total profit or loss of a company after all expenses, including taxes and operating costs, have been deducted from total revenues.

Book Value

The net value of a company's assets as recorded on its balance sheet, subtracting liabilities from total assets.