Figure 13-7 Suppose a Firm Operating in a Competitive Market Has the Has

question 471

Multiple Choice

Figure 13-7
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 13-7.Which segment of the supply curve represents the firm shutting down?

• A) ABCD
• B) BCD
• C) CD
• D) AB

---

Definitions:

Return on Investment

A financial ratio measuring the gain or loss generated on an investment relative to the amount of money invested.

Selling Price

The amount of money charged for a product or service, typically set to cover costs and generate profit.

Absorption Costing

This accounting technique aggregates the total manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—into the calculation of a product’s price.

Cost-plus Pricing

A pricing strategy where a fixed percentage or a fixed amount is added to the cost price to determine the selling price.