The Figure Given Below Shows the Revenue and Cost Curves

question 65

Multiple Choice

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-For a perfectly competitive firm, in the short run, which of the following statements is true?

• A)A price above minimum average variable cost, but below average total cost will produce an economic profit.
• B)A price below minimum average variable cost will cause the firm to shut down.
• C)Marginal cost is parallel to the axis showing quantity of output.
• D)Price is always greater than marginal revenue.
• E)Every firm contributes a significant amount to the total market output.

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Definitions:

NPVGO

Net Present Value of Growth Opportunities; the present value of future investments' cash flows minus initial investments.

Dividend Growth Rate

The annual percentage rate of growth of a company’s dividend payments to shareholders.

Investor's Return

The positive or negative shift in an investment's financial value during a set interval, portrayed as a percentage of the investment's initial price.

Stock Price

The cost of purchasing a share of a company's stock, determined by the supply and demand for it in the market.