What Is the Term for the Price at Which the Firm

question 50

Multiple Choice

What is the term for the price at which the firm makes only normal profits?

• A)Shutdown price.
• B)Break-even price.
• C)Average price.
• D)Economic price.

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Definitions:

Option Agreement

A subsidiary contract creating an obligation to hold an offer open for acceptance until the expiration of a specified time.

Lease

A secured arrangement whereby possession of the goods goes to the lessee, while the title to the goods remains with the lessor.

Interest

Money paid at a particular rate for the use of borrowed money, or the right or share someone has in a given asset or wealth.

Fee Simple

The most complete ownership interest one can have in real property, with the absolute right to use it, dispose of it, and inherit it, subject only to government restrictions.