If Price Is Between AVC and ATC, the Best and Most

question 163

Multiple Choice

If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is:

• A) raise prices.
• B) lower prices to gain revenue from extra volume.
• C) shut down immediately, but not liquidate the business.
• D) shut down immediately and liquidate the business.
• E) continue operating, but plan to go out of business.

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Definitions:

Malnutrition

A condition resulting from eating a diet in which one or more nutrients are either not enough or are too much, causing health problems.

Obesity

A medical condition characterized by excessive body fat that increases the risk of health problems such as heart disease and diabetes.

Grams

A metric unit of mass equal to one thousandth of a kilogram, used commonly in science and everyday life for measuring weight.