A Firm in a Competitive Market Has the Following Cost

question 214

Multiple Choice

A firm in a competitive market has the following cost structure: If the market price is $4,this firm will

• A) produce 2 units in the short run and exit in the long run.
• B) produce 3 units in the short run and exit in the long run.
• C) produce 4 units in the short run and exit in the long run.
• D) shut down in the short run and exit in the long run.

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Definitions:

Total Revenue

A rephrased definition: Total Revenue is the full amount of income generated by the sale of goods or services before any expenses are subtracted.

Total Revenue

The aggregate financial gains a corporation obtains from the sale of products or rendition of services within a designated duration.

Profit

The financial gain realized when the revenue earned from selling goods or services exceeds the costs, expenses, and taxes needed to sustain the activity, indicating the financial success of a business.

Total Revenue

The total amount of money received by a company from its sales of goods or services, before any expenses are subtracted.