A Purely Competitive Firm Is Currently in Short-Run Equilibrium and Its

question 13

Multiple Choice

A purely competitive firm is currently in short-run equilibrium and its MC exceeds its ATC at its current output level. It can be concluded that

• A) firms will leave the industry in the long run.
• B) the firm is realizing an economic profit.
• C) the firm is suffering an economic loss.
• D) the firm will shut down in the short run.

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Definitions:

Foreign Exchange Rate

The rate at which one currency can be swapped for a different currency.

International Customer

A customer residing in a different country than the one where the seller's business operates, often requiring considerations for shipping, customs, and currency exchange.

Fiscal Year

A one-year period used for accounting and financial reporting purposes, which may not align with the calendar year.

Foreign Exchange Gain

Profit arising from fluctuations in exchange rates which increase the value of foreign currency-denominated assets.