Which of the Following Is TRUE

question 130

Multiple Choice

Which of the following is TRUE?

• A) If the price falls below the average total cost, the firm will earn economic profits.
• B) Price and marginal revenue are the same in perfect competition.
• C) Economic profit per unit is found by subtracting AVC from the price.
• D) Economic profit is always positive in the short run.

---

Definitions:

Kemp-Roth Tax Cut

A significant federal tax reduction in the US that was passed in 1981, aimed at encouraging economic growth by reducing individual income tax rates.

Federal Personal Income Tax

A tax levied by the U.S. federal government on the annual income of individuals, with rates varying based on income level.

President's Budget

An annual proposal by the U.S. President outlining the government's planned financial activities and spending for the upcoming fiscal year.

Office of Management and Budget

A federal office within the Executive Branch of the United States government that assists the President in preparing the budget and monitoring federal agencies.