Refer to the following graph.
The perfectly competitive firm depicted is currently:
A. incurring a loss, but the loss is smaller than it would be if the firm shut down.
B. earning positive economic profit.
C. earning zero economic profit.
D. incurring a loss that is larger than total fixed cost, and so the firm should shut down.
Answer: A
You might also like to view...
A perfectly competitive firm will have an economic profit of zero if, at its profit-maximizing output, its marginal revenue equals its
A) average total cost. B) marginal cost. C) average variable cost. D) average fixed cost.
In an oligopoly, the demand curve facing an individual firm depends upon
a. the behavior of competing firms b. the shape of the firm's average total cost curve c. the shape of the firm's marginal cost curve d. the firm's supply curve e. the shape of the firm's average variable cost curve
When there is an inflationary gap there is
A. too much spending and taxes should be raised. B. too much spending and taxes should be lowered. C. too little spending and taxes should be raised. D. too little spending and taxes should be lowered.
The shaded area in Figure 24.1 represents
A. Total cost. B. Total loss. C. Total revenue. D. Total profit.