When Economic Profits Are Zero for a Firm in a Perfectly

question 7

Multiple Choice

When economic profits are zero for a firm in a perfectly competitive market,it means that:

• A) average total costs are zero.
• B) price is equal to minimum average total cost.
• C) average variable costs are minimized.
• D) MR is equal to AVC.

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Definitions:

Financial Statements

Reports that summarize the financial condition and operations of a business, including balance sheet, income statement, and cash flow statement.

FIFO

First-In, First-Out, an accounting method for managing inventory and financial matters where the oldest inventory items are sold or used first.

Inventory Costing

A method used to assign costs to inventory items and determine the cost of goods sold during a period.

Purchase Order

A document issued by a buyer to a seller, specifying the types of products, quantities, and agreed prices for products or services the seller will provide to the buyer.