In the Short Run, a Perfectly Competitive Firm Will Shut

question 8

Multiple Choice

In the short run, a perfectly competitive firm will shut down and produce nothing if:

• A) excess profits equal zero.
• B) total cost exceeds total revenue.
• C) total variable cost exceeds total revenue.
• D) the market price falls below the minimum average total cost.

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Definitions:

Water Shortages

Situations where the available supply of water is not sufficient to meet the demands of the population.

Tradeable Property Rights

Legal rights that allow owners to sell, lease, or otherwise transfer their property or its use to others.

Monopoly

An economic scenario where only one seller exists who offers a distinctive product to the marketplace.

Price Discrimination

A pricing strategy where different prices are charged for the same product or service in different markets or to different consumers.