In the Short Run, a Perfectly Competitive Firm

question 477

Multiple Choice

In the short run, a perfectly competitive firm

• A) shuts down if it incurs any economic loss.
• B) incurs an economic loss if it shuts down.
• C) does not consider total revenue in its shut down decision.
• D) can earn a small economic profit while being shut down.

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Definitions:

Inventory Management Systems

Technologies and strategies used to oversee the ordering, storing, and use of a company’s inventory.

Production Schedules

Plans that outline the timing and sequence of manufacturing operations to meet production targets and manage resources efficiently.

EOQ Model

The Economic Order Quantity model is used to determine the optimal order size to minimize the total inventory costs.

Accounts Receivable

Amounts outstanding from customers to a company for goods or services provided but still unpaid.