Table 84 Table 8

question 58

Multiple Choice

Table 8.4 Table 8.4 shows the short-run cost data of a perfectly competitive firm.Assume that output can only be increased in batches of 20 units.
-Refer to Table 8.4.If the market price is $45, the firm

• A)will earn a profit of $3600.
• B)will suffer a loss of $200.
• C)will break even.
• D)will earn profit of $1040.

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Definitions:

Shutting Down

A short-run decision by a firm to cease production temporarily due to unfavorable market conditions.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.

Operate

The act of controlling or managing the functions of something, like machinery or a business.

Economic Profit

The distinction between the income generated from selling a product and the opportunity cost of the resources utilized.