9.3 Short-Run Decisions Assume the Following Total Cost Schedule for a Perfectly Competitive

question 73

Multiple Choice

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
TABLE 9-2
-Refer to Table 9-2.At what price would a profit-maximizing firm earn zero economic profits?

• A)$40
• B)$70
• C)$145
• D)$220
• E)$430

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Definitions:

Beginning Inventory

The market value of products prepared for sale at the initiation of a bookkeeping period.

Merchandise Inventory

Goods or products that a company holds for the purpose of resale to customers, recorded as a current asset on the balance sheet.

Income Summary

is an account that aggregates all revenue and expenses during an accounting period, used to transfer the net income (or loss) to the capital account.

Freight-in

represents the cost of transporting goods into a business, typically considered as part of the cost of goods sold.