When a Firm Is at Its Short-Run Break-Even Point

question 16

Multiple Choice

When a firm is at its short-run break-even point

• A) economic profits are positive.
• B) economic profits equal zero and the firm should shut down.
• C) economic profits equal zero and the firm is earning a nominal rate of return on investment.
• D) economic profits are negative but the firm should continue to produce because accounting profits are positive.

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Definitions:

Deprivation

A lack or denial of something considered to be a necessity, leading to adverse effects on physical or psychological well-being.

Homeostasis

The self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.

Drive

An internal urge that motivates behavior towards fulfilling a need or achieving a goal.

Motivation Theorist

An individual who studies and develops concepts explaining why people are driven to meet certain needs or pursue particular goals.