Bob Runs a Pedicure Business in a Perfectly Competitive Industry

question 231

Multiple Choice

Bob runs a pedicure business in a perfectly competitive industry. He knows that he will break even if the price of pedicures is $15 but that he will have to shut down if the price is $11. If the market demand in the industry is P = 30 - (0.2) Q and the market supply is P = (0.2) Q, in the short run, Bob will:

• A) shut down, since he cannot cover any of his variable costs.
• B) produce but just break even.
• C) produce with a loss, since he is operating below his break-even level.
• D) shut down, although he is making a positive economic profit.
• Answer Key

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Definitions:

Elective Abortion

A procedure to intentionally terminate a pregnancy that is chosen for reasons other than the health or life of the pregnant person.

Fetal Personhood

The ethical and legal concept relating to the rights or moral considerations given to fetuses.

Partial Birth Abortion

A controversial term used to describe a late-term abortion procedure where the fetus is partially delivered before termination.

Constitutional Right

A right provided and protected by a country's constitution, often considered fundamental to the citizens' freedom and justice.