In the Long Run,a Perfectly Competitive Firm

question 250

Multiple Choice

In the long run,a perfectly competitive firm

• A) can make either an economic profit or a normal profit.
• B) incurs an economic loss.
• C) makes zero economic profit.
• D) can make an economic profit, zero economic profit, or incur an economic loss.
• E) makes an economic profit.

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Definitions:

IFRS

International Financial Reporting Standards, a set of global accounting guidelines that govern how companies prepare and disclose their financial statements.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Current Liability

A company's debts or obligations that are due within one year, including accounts payable, short-term loans, and taxes payable.

Warranty Liability

The obligation a company assumes when it guarantees the condition of its product and agrees to repair or replace defective products.