Use the Figure Below to Answer the Following Questions

question 114

Multiple Choice

Use the figure below to answer the following questions.

Figure 14.2.3
-Refer to Figure 14.2.3. Assume this firm faces demand curve D₂. If the firm produces the efficient quantity, it

• A)makes an economic profit.
• B)makes zero economic profit.
• C)incurs an economic loss.
• D)is in a long-run equilibrium.
• E)will face competition from new firms entering the industry.

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Definitions:

Liquidating Dividend

A payment made by a corporation to its shareholders from its capital rather than its earnings, often signaling the winding down or dissolution of the company.

Cash Payment

A transaction in which goods or services are paid for with physical currency or through an immediate electronic funds transfer.

Firm's Assets

The economic resources owned by a business, including cash, property, equipment, and intellectual property, which are used to generate revenue.

Stock Split

A business procedure in which a corporation splits its current shares into more shares to increase the shares' marketability.