Which of the following statements is FALSE?
A) In the short run, a monopolist might operate even though it is incurring an economic loss, but in the short run a perfectly competitive firm always shuts down if it is incurring an economic loss.
B) A monopoly can earn an economic profit in the long run, but a perfectly competitive firm cannot.
C) A monopoly can set its price while a perfectly competitive firm cannot.
D) A monopoly is protected by barriers to entry while a perfectly competitive firm is not.

Question

Quizplus · Accepted Answer

In the short run, a perfectly competitive firm may continue to operate even if it incurs an economic loss, as long as it can cover its variable costs. It will only shut down if it cannot cover these costs.

Which of the Following Statements Is FALSE