Jose's Restaurant Operates in a Perfectly Competitive Market

question 471

Multiple Choice

Jose's restaurant operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $20, AVC = $15, and the price per unit is $10. In this situation,

• A)Jose's restaurant is earning a positive economic profit.
• B)Jose's restaurant should shut down immediately.
• C)Jose's restaurant is losing money in the short run but should continue to operate.
• D)the market price will rise in the short run to increase profits.

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Definitions:

Calcium

A chemical element essential for living organisms, notably in cell signaling, muscle function, and bone strength.

Vitamin K

A fat-soluble vitamin necessary for the synthesis of proteins involved in blood clotting and bone metabolism.

Nerve Damage

Injury to nervous tissue that can result in loss of function, feeling, or mobility in the affected area.

Normal Growth

The expected progression of physical development in living organisms, often measured by size, weight, and other physical traits.