In the short run if a perfectly competitive firm finds itself operating at a loss, it will
A. Reduce the size of its plant to lower fixed costs
B. Raise the price of its product
C. Shut down
D. Continue to operate as long as it covers its variable cost
Answer: Option D
Solution(By Examveda Team)
In the short run if a perfectly competitive firm finds itself operating at a loss, it will continue to operate as long as it covers its variable cost.The capital that is consumed by an economy or a firm in the production process is known as
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Who propounded the opportunity cost theory of international trade?
A. Ricardo
B. Marshall
C. Heckscher & Ohlin
D. Haberler
Which among the following statement is INCORRECT?
A. On a linear demand curve, all the five forms of elasticity can be depicted
B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
A. Increase
B. Decrease
C. Remain the same
D. Become zero
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