In the Short Run, a Perfectly Competitive Firm Will Always

question 160

Multiple Choice

In the short run, a perfectly competitive firm will always shut down if, at all output levels above zero,

• A)price is less than average total cost
• B)total revenue is less than total cost
• C)they cannot pay variable costs with total revenue
• D)variable cost is greater than fixed cost
• E)price is less than fixed cost

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Definitions:

Ice Melting

The physical process by which ice transitions to liquid water as it absorbs heat from its surroundings, typically occurring at 0 degrees Celsius under standard atmospheric pressure.

Density

The mass per unit volume of a substance, often used as an identifying property of various materials.

Mass

A measure of the amount of matter that an object contains; also a fundamental property of an object that determines its inertia and gravitational interaction.

Liquid

A state of matter characterized by a definite volume but no definite shape, allowing it to flow freely.