Figure 12-9 Figure 12-9 Shows Cost and Demand Curves

question 236

Multiple Choice

Figure 12-9 Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive firm.
-If a firm shuts down in the short run,

• A) its loss equals zero.
• B) its loss equals its fixed cost.
• C) it makes zero economic profit.
• D) its total revenue is not large enough to cover its fixed cost.

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Definitions:

Collection Period

A metric that measures the length of time it takes for a business to convert its accounts receivable into cash.

Accounts Receivable Balance

The combined total of receivables a business has from its customers for goods or services that have been consumed but remain unpaid.

Calendar Year

The period of time from January 1 to December 31 in the Gregorian calendar.

Sales Estimate

An approximation of the number or monetary value of sales that a company expects to achieve within a certain period.