A Perfectly Competitive Firm Will Not Produce Any Output in the Short

question 333

Multiple Choice

A perfectly competitive firm will not produce any output in the short run and will shut down if the price is:

• A)greater than marginal cost.
• B)less than marginal cost.
• C)less than average variable cost.
• D)greater than average variable cost and less than average total cost.

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Definitions:

Project Ranking

The process of ordering projects by some criteria such as profitability, risk, or strategic value to prioritize investments and resource allocation.

Profitability Index

An instrument in finance that quantifies the potential profit of an investment by dividing the current value of anticipated cash flows by the initial cost of investment.

Modified Internal Rate Of Return

An adjustment of the Internal Rate of Return formula that rectifies its limitations by incorporating different reinvestment rates for cash flows received over the investment's lifetime.