Below the Short-Run Shutdown Price, the Firm

question 181

Multiple Choice

Below the short-run shutdown price, the firm

• A) is earning positive economic profits.
• B) is earning negative economic profits.
• C) is making a normal rate of return on its capital investment.
• D) may be earning a positive or negative economic profits depending upon costs.

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Definitions:

Trailer

Any of a number of different types of nonpowered, load-carrying vehicles towed by another vehicle.

Hold-Off Circuit

A type of circuit used to delay or prevent the activation of part of a system until certain conditions are met.

System Air Pressure

The pressure of the air in a pneumatic system, which is critical for the operation of air-powered tools or vehicles.

Parking Brakes

A mechanism in vehicles designed to keep the vehicle stationary by mechanically locking the wheels, also known as a handbrake or emergency brake.