Figure 9-17 -Which of the Following Statements About the Competitive Price-Taker Firm

question 104

Multiple Choice

Figure 9-17
-Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?

• A) Short-run losses are minimized at output level q* because MR = MC there.
• B) The firm should shut down in the short run.
• C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost.
• D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost.
• E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.

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Definitions:

Parliamentary Supremacy

The principle that the legislative body of a country has the highest authority over all other governmental institutions, including the judiciary.

Supervising Government Decision Makers

The oversight of individuals or bodies that make policy and regulatory decisions within the government framework.

Writ of Certiorari

A court order that requests the lower court to deliver its record in a case so the higher court can review it.

Mandamus

A legal order directed from a higher court to a lower court, or mandating an individual to carry out a duty required by law.