In the Short Run,a Perfectly Competitive Firm

question 79

Multiple Choice

In the short run,a perfectly competitive firm

• A) can make only zero economic profit.
• B) can possibly make an economic profit or possibly incur an economic loss.
• C) produces the level of output that sets the average total cost equal to the market price.
• D) can vary all its inputs.
• E) can change only its fixed inputs.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating its efficiency in managing and selling stock.

Liquidity

The ease with which an asset can be converted into cash without significantly affecting its market price.

Days In Inventory

A financial metric that indicates the average number of days a company takes to turn its inventory into sales.

Credit Sales

Sales made by a business where the payment is delayed as per an agreement between the buyer and the seller.