If a Perfectly Competitive Firm in the Short Run Is

question 46

Multiple Choice

If a perfectly competitive firm in the short run is producing where P = ATC = MC,this firm is

• A)at its profit-maximizing output level.
• B)obliged to shut down.
• C)on the downward-sloping portion of its demand curve.
• D)earning economic profits.
• E)incurring losses.

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Definitions:

Investment Center

A division or unit within a company that is responsible for its own revenues, expenses, and assets, and its performance is evaluated on its return on investment.

Generates Revenue

Activities or processes that result in the earning of income for a business through the sale of goods or services.

Incurs Costs

To undergo or suffer expenses during the execution of activities or operations.

Profit Center

A business segment or department within an organization that is responsible for generating its own revenue and thereby directly impacting profitability.