In Deciding Whether to Operate in the Short Run, the Firm

question 60

Multiple Choice

In deciding whether to operate in the short run, the firm must consider the relationship between price and

• A)total cost.
• B)average variable cost.
• C)total fixed cost.
• D)the number of buyers.

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Definitions:

Trading Securities

Financial instruments bought and sold for the purpose of generating profits on short-term fluctuations in price.

Unrealized Gains

Profits that have been achieved on paper from investments but have not yet been sold for cash, and therefore are not reflected in the income statement.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.

Fair Value Adjustment

An accounting process to adjust the book value of assets or liabilities to their current market value, often for financial reporting purposes.