Figure 9-17
Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?
A) Short-run losses are minimized at output level q* because MR = MC there.
B) The firm should shut down in the short run.
C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost.
D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost.
E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.

Question

Figure 9-17 
Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?
A) Short-run losses are minimized at output level q* because MR = MC there. 
B) The firm should shut down in the short run. 
C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost. 
D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost. 
E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.

Quizplus · Accepted Answer

The Answer of Figure 9-17 
Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?
A) Short-run losses are minimized at output level q* because MR = MC there. 
B) The firm should shut down in the short run. 
C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost. 
D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost. 
E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.

Figure 9-17 Which of the Following Statements About the Competitive Price-Taker Firm