If a Perfect Competitor's ATC Curve Is Above Its Demand

question 283

Multiple Choice

If a perfect competitor's ATC curve is above its demand curve for every possible output the firm is

• A)losing money in the short run.
• B)losing money in the long run.
• C)making a profit in the short run.
• D)making a profit in the long run.

---

Definitions:

Nonrival in Consumption

A characteristic of some goods or services where one person's consumption does not reduce availability for others.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, a key concept used in decision-making and pricing strategies.

Public Good

A good that is non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from its use and one person's use does not reduce availability to others.

Grocery Store

A retail store that sells food and other household goods.