Figure 9-14 -Figure 9-14 Shows the Cost Curves for a Perfectly Competitive

question 141

Multiple Choice

Figure 9-14

-Figure 9-14 shows the cost curves for a perfectly competitive firm.This firm's shutdown price is

• A)$5.
• B)$7.
• C)$10.
• D)$14.

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Definitions:

Initial Outflow

The initial cash expenditure required to undertake an investment or project.

Average Accounting Return

A measure of investment profitability calculated as the average annual net earnings of a project divided by the average investment in the project.

Straight-Line Method

An accounting method for allocating the cost of an asset evenly over its useful life.

Cost of Capital

The obligatory profit percentage a corporation needs to achieve on its investments to keep its market share and attract investors.