A Firm Operating in a Perfectly Competitive Industry Will Shut

question 111

True/False

A firm operating in a perfectly competitive industry will shut down in the short run if its economic profits fall to zero because it is likely to be earning negative accounting profits.

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Definitions:

Equilibrium Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in the market, resulting in no unemployment.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choice.

Employment Opportunities

Available job positions or career prospects within the job market.

Opportunity Cost

The value of the next best alternative foregone as a result of making a decision; the cost of missing out on the second best choice while selecting among several options.