If a Perfectly Competitive Firm Is Maximizing Profits in the Short

question 162

Multiple Choice

If a perfectly competitive firm is maximizing profits in the short run,what does this mean?

• A) The profit must be positive.
• B) The profit equals zero.
• C) The profit must be zero or positive.
• D) The profit can be negative,zero,or positive.
• E) The profit must be negative.

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Definitions:

Income Taxes

Taxes that individuals or entities are required to pay to a government, based on income earned over a fiscal period; these taxes vary by country and the details of the taxpayer's income situation.

Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term liquidity of the business.

Income Tax Rate

The proportion of earnings handed over to the government as tax.

After-Tax Discount Rate

The discount rate that takes into account the effect of taxes on the net income from an investment.