A perfectly competitive firm will operate and incur an economic loss in the short run if A. it knows it can recoup the loss in the long run. B. shareholders do not know about the loss. C. the loss is smaller than its total fixed costs. D. the loss can offset future profits.

A perfectly competitive firm will operate and incur an economic loss in the short run if A. it knows it can recoup the loss in the long run. B. shareholders do not know about the loss. C. the loss is smaller than its total fixed costs. D. the loss can offset future profits.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 5PA

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Question

59. A perfectly competitive firm will operate and incur an economic loss in the short run if

A. it knows it can recoup the loss in the long run.

B. shareholders do not know about the loss.

C. the loss is smaller than its total fixed costs.

D. the loss can offset future profits.

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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