Which of the Following Will Not Happen as a Consequence

question 134

Multiple Choice

Which of the following will not happen as a consequence of a monopolistically competitive firm suffering economic losses in the short run?

• A)The firm's demand curve will shift to the right if it stays in business in the long run.
• B)The firm will exit the industry if it continues to suffer economic losses.
• C)The firm will break even if its stays in business in the long run.
• D)In the long run, the firm will be able to charge a price that is greater than its average total cost.

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Definitions:

Income Tax Rate

The tax rate applied to the income of companies or individuals.

After-Tax Discount Rate

A discount rate that takes into account the effect of taxes when evaluating the net present value of investments or projects.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, which evenly spreads the cost over its useful life.

Initial Investments

The initial amount of money spent to start a project, purchase an asset, or establish a business venture, often before earning any returns.