If a Competitive Firm Cannot Earn Profit at Any Level

question 97

Multiple Choice

If a competitive firm cannot earn profit at any level of output during a given short-run period,then which of the following is LEAST likely to occur?

• A) It will shut down in the short run and wait until the price increases sufficiently.
• B) It will exit the industry in the long run.
• C) It will operate at a loss in the short run.
• D) It will minimize its loss by decreasing output so that price exceeds marginal cost.

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Definitions:

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A physical defect present from birth, resulting from an abnormality in the development process.

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Abnormal, or unexpected, condition.

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Newborn

A term used to describe an infant in the first few hours to weeks of life, typically up to 28 days old.