If a Perfectly Competitive Firm's Price Is Above Its Average

question 178

Multiple Choice

If a perfectly competitive firm's price is above its average total cost, the firm

• A)is earning a profit.
• B)should shut down.
• C)is incurring a loss.
• D)is breaking even.

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Definitions:

Legally Binding

A contract or agreement that is enforceable by law, where parties are obligated to fulfill their contractual duties.

Terms of Employment

The conditions and agreements under which employees are hired, including duties, hours, salary, and benefits.

Demand for Unions

The need or desire among workers to join or form unions to collectively bargain for better wages, benefits, and working conditions.

Protective Legislation

Refers to laws and regulations put in place to ensure the safety, health, and welfare of workers in the workplace.