The Figure Shows a Representative Firm in a Price-Taker Market

question 181

Multiple Choice

The figure shows a representative firm in a price-taker market.Which of the following is true regarding the situation depicted in the figure?

• A)This firm should shut down immediately.
• B)This firm is earning positive economic profit.
• C)This firm is able to cover its variable cost but not its total cost.
• D)All of the above are true.

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Definitions:

List Price Deductions

Discounts, allowances, or reductions from a product's standard list price that sellers may offer to buyers.

Performing Activity

The act of carrying out tasks or duties that contribute to the achievement of specific objectives.

Geographical Adjustments

modifications made to policies, wages, or prices to reflect the cost of living or market conditions in different locations.

Warehouse Inventory

The stock of goods and materials held by a company in a warehouse for processing or distribution.