If Marginal Revenue Exceeds Marginal Cost in the Short Run

question 4

True/False

If marginal revenue exceeds marginal cost in the short run, the perfectly competitive firm earns an economic profit in the short-run.

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Definitions:

Tax

A compulsory monetary fee or different form of levy placed on a taxpayer by a government body to finance government expenses and various public outlays.

Opportunity Cost

The cost of choosing one option over another, represented by the value of the foregone alternative.

Deadweight Loss

An economic inefficiency occurring when there is an imbalance between supply and demand leading to a loss of economic value, often caused by government interventions like taxes or subsidies.

Equilibrium Quantity

The amount of products or services available and sought after at the market's balance price.